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:
(1) Requires a $1,000,000 investment and is expected to yield annual net income of $160,000.
The second location:
(2) Requires a $ 600,000 investment and is expected to yield annual net income of $108,000. Compute the return on investment for each Fast & Great Burgers alternative and then make your recommendation in a one-half page memorandum to the regional manager. (The chain currently generates an 18% return on total assets.)