Calculate the ROI and residual income for each hotel

Reference no: EM132717083

Question - There are two different hotel chains that you have identified as potential investment opportunities. You are looking for a minimum required rate of return of 8 per cent. As a starting point, you have accumulated some basic information to calculate the return on investment and residual income.

Sales	Hotel Aster	Hotel Bella
Net operating income	$10,000,000	2,000,000
Average operating assets	2,000,000	3,000,000

Required - Calculate the ROI and residual income for each hotel. Explain the meaning of your calculations.

Reference no: EM132717083

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