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You must prepare a return on investment analysis for the regional manager of Fast & Great Burgers. This growing chain is trying to decide which outlet of two alternatives to open. The first location (A) requires a $500,000 investment and is expected to yield annual net income of $70,000. The second location (B) requires a $200,000 investment and is expected to yield annual net income of $44,000.

Respuesta :

Answer:

14% and 22%

Explanation:

The formula to compute the return on investment is shown below:

Return on investment = Net income ÷ Investment

The preparation of the return on investment analysis is shown below:

                                         Fast & Great Burgers

                                  Return on investment analysis

                            Numerator    ÷   Denominator  = Return on investment

Location A            $70,000       ÷   $500,000        = 14%

Location B            $44,000       ÷   $200,000        = 22%

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