Reference no: EM13952954
Decision making with return on investment You are the controller of a chain of dry-cleaning establishments. You are computing the return on investment for each outlet.
Outlet A, located in a city core, reported a net profit of $130,000. The land on which Outlet Ais located was essentially rural when it was purchased for $100,000. Since then, the city has expanded, and the land is now located in the population center. Comparable undeveloped land in the immediate area of the outlet is worth $2,000,000. The net book value of the outlet building and equipment is $400,000. The replacement cost of the building and equipment is $1,200,000. If the outlet building, equipment, and land were sold as a going concern, the sale price would be $1,500,000. It would cost $250,000 to demolish the building and clear the property for commercial development.
Required
(a) What is the return on this investment?
(b) How would you decide whether this outlet should continue to be operated, sold as a going concern, or demolished and the land sold?
|
What type of test is preferable to run in this situation
: In the previous exercise there were two possible outcomes; reject the null hy- pothesis or fail to reject the null hypothesis. Explain in your own words what is meant by these outcomes.
|
|
How do they differ from your original hypotheses explain
: Identify any new conclusions and theories you may have developed about the behavior of people in the setting you chose. How do they differ from your original hypotheses? Explain
|
|
What is the hypothesis set for a two-tailed test
: We suspect that the average fasting blood sugar level of Mexican Americans is 108. A random sample of 225 clinic patients (all Mexican American) yields a mean blood sugar level of 119 (S2 = 100). Test the hypothesis that µ. = 108. What is the ..
|
|
A factor but a small factor
: Knowing an estimate of what it ultimately costs to make all of those changes may be a factor but a small factor. If you don't have any customer base it does not matter how much money your company has. The level of harm that is being caused to people ..
|
|
What is the return on the given investment
: What is the return on this investment? How would you decide whether this outlet should continue to be operated, sold as a going concern, or demolished and the land sold?
|
|
What makes mirror reflective
: What makes mirror reflective?
|
|
Calculate productivity as dollar sales per dollar input
: Franklin sells these chairs to a retailer for $40 each. What is themultifactorproductivity for a typical day? Calculate productivity as dollar sales per dollar input. Enter only the numerical answer rounded to the nearest whole number.
|
|
Level of market concentration in the industry
: Consider the following questions: What are the main companies in the industry? What is the level of market concentration in the industry? To what extent are the products/services from this industry homogenous?
|
|
Using the all investments involve risk
: Using the All investments involve risk. The return an investor may expect from income and/or capital appreciation might not occur. Understanding risk, the sources of risk, and how to measure it are critical concepts to master.On pages 173-175 of the ..
|