Question

Assume that fast-food restaurants generally provide an ROI of 12%, but that such a restaurant near a college campus has an RO

0 0
Add a comment Improve this question Transcribed image text
Answer #1
a-1
Yes, as ROI is greater than 12%
a-2
Earnings per year 90000 =600000*15%
Maximum price 750000 =90000/12%
b
Goodwill 150000 =750000-600000
Add a comment
Know the answer?
Add Answer to:
Assume that fast-food restaurants generally provide an ROI of 12%, but that such a restaurant near...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • Assume that fast-food restaurants generally provide an ROI of 12%, but that such a restaurant near...

    Assume that fast-food restaurants generally provide an ROI of 12%, but that such a restaurant near a college campus has an ROI of 15% because its relatively large volume of business generales an above average turnover (sales/assets). The replacement value of the restaurant's plant and equipment is $600,000. If you were to invest that amount in a restaurant elsewhere in town, you could expect a 12% ROL Required: -1. Would you be willing to pay more than $600,000 for the...

  • Assume that fast-food restaurants generally provide an ROI of 15%, but that such a restaurant near...

    Assume that fast-food restaurants generally provide an ROI of 15%, but that such a restaurant near a college campus has an ROI of 19% because its relatively large volume of business generates an above average turnover (sales/assets). The replacement value of the restaurant's plant and equipment is $210,000. If you were to invest that amount in a restaurant elsewhere in town, you could expect a 15% ROI. Required: a-1. Would you be willing to pay more than $210,000 for the...

  • Assume that fast-food restaurants generally provide an ROI of 16% but that such a restaurant near...

    Assume that fast-food restaurants generally provide an ROI of 16% but that such a restaurant near a college campus has an ROI of 18% because its relatively large volume of business generates an above average turnover sales/assets). The replacement value of the restaurant's plant and equipment is $192.000. If you were to invest that amount in a restaurant elsewhere in town, you could expect a 16% ROI (8 Required: 2-1. Would you be willing to pay more than $192,000 for...

  • Exercise 6.18 Goodwill-effect on ROI and operating income Goodwill arises when one firm LO 9 acquires...

    Exercise 6.18 Goodwill-effect on ROI and operating income Goodwill arises when one firm LO 9 acquires the net assets of another firm and pays more for those net assets than their current fair value. Suppose that Target Co. had operating income of $1,215,000 and net assets with a fair value of $5,400,000. Takeover Co. pays $8,100,000 for Target Co.'s net assets and business activities. Required: a. How much goodwill will result from this transaction? b. Calculate the ROI for Target...

  • Crow Co. purchased some of the machinery of Hare Inc., a bankrupt competitor, at a liquidation...

    Crow Co. purchased some of the machinery of Hare Inc., a bankrupt competitor, at a liquidation sale for a total cost of $16,000. Crow’s cost of moving and installing the machinery totaled $2,900. The following data are available: Item Hare’s Net Book Value on the Date of Sale List Price of Same Item If New Appraiser’s Estimate of Fair Value Punch press $ 10,050 $ 17,000 $ 14,000 Lathe 8,970 10,000 6,000 Welder 2,350 6,000 3,040 Required: a. Calculate the...

  • 3.Jethro’s BBQ Food Truck.Jethro’s BBQ is a local chain of restaurants located at centralIowa. Bruce, the...

    3.Jethro’s BBQ Food Truck.Jethro’s BBQ is a local chain of restaurants located at centralIowa. Bruce, the owner of the restaurant located at Ames, is thinking about expanding his business using a food truck that would be located during weekdays at the ISU campus. One important aspect for the planning of such project is to determine what would be a reasonable price range for the food. The prices need to be appealing and affordable for college students and at the same...

  • Grazyna owns a restaurant in Bozeman, Montana, called the Bluehorn Buffalo Diner. Her restaurant is very...

    Grazyna owns a restaurant in Bozeman, Montana, called the Bluehorn Buffalo Diner. Her restaurant is very popular among Californian Sacramento residents who visit her town and restaurant in large numbers during the summer. With the recent expansion and remodeling of her restaurant, she has decided to run television ads in Sacramento during the winter to promote her renewed restaurant. So, she contacted you because of your position as the television advertising salesperson of a main TV channel in Sacramento. Grazyna...

  • I need help on the highlighted questiona. For questions 2,4, & 5 I need help with...

    I need help on the highlighted questiona. For questions 2,4, & 5 I need help with the step by step process to the answers. Thanks! what financial data do you need? i sent a photo of the assigment. The last photo is of a balance sheet and income statement QUESTIONS 1. Give as many reasons as you can why Moore's initial estimate of the value of the restaurant was inappropriate. 2. Calculate the current liquidation value of the business assuming...

  • Question 12 pts When consumers would have been willing to pay higher prices at various quantities...

    Question 12 pts When consumers would have been willing to pay higher prices at various quantities consumed than the market clearing price, the differences are called consumer surplus. monopoly profits. opportunity cost. deadweight loss. Flag this Question Question 22 pts A demand relationship in which the quantity demanded changes exactly in proportion to the change in price is elastic. unit-elastic. inelastic. consistent with zero elasticity. Flag this Question Question 32 pts A demand relationship in which a given percentage change...

  • Can you please provide the formula for the worksheet also. CASE PROBLEMS Level 1- Analyzing Sales...

    Can you please provide the formula for the worksheet also. CASE PROBLEMS Level 1- Analyzing Sales for Crèmes Ice Cream Judd Hemming is the eastern regional marketing manager for Crèmes Ice Cream. Eac quarter, he completes two separate analyses: an analysis comparing ice cream flavor sale volumes from all regional locations with the same quarter sales volumes from the previou year and an analysis comparing total sales in dollars, including mean, median, mode, and standard deviation, of sales by store....

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT