Question: 1. Apple is considering expanding a store. Identify three methods management can use to evaluate whether to expand.
2. Cardinal Company is considering an investment expected to generate an average net income after taxes of $1,300 for three years. The investment costs $30,000 and has an estimated $4,000 salvage value. Compute the accounting rate of return for this investment; assume the company uses straight-line depreciation. Use the formula in Exhibit when computing the average annual investment.