Maximum price you would be willing to pay for the business

Assignment Help Financial Accounting

Reference no: EM131263850

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 generates 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% ROI.

What is the maximum price you would be willing to pay for the business?

Reference no: EM131263850

Questions Cloud

Drivign growth goal and building brilliant teams goal : Drivign Growth Goal, Delivering Flawlessly Goal, Building Brilliant Teams Goal

Prepare an income statement through gross profit for month : Peters Manufacturing Company has the following data at June 30, 2016: Raw materials inventory, June 1 $ 13,800 Work in process inventory, June 1 18,100 Finished goods inventory, Sales 580,000 Work in process inventory, June 30 30,400 Finished goods i..

New break-even point in both unit sales and dollar sales : Due to erratic sales of its sole product—a high-capacity battery for laptop computers—PEM, Inc., has been experiencing difficulty for some time. Compute the company’s CM ratio and its break-even point in both unit sales and dollar sales. Compute the ..

Maximum price you would be willing to pay for the business : 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 generates an above-average turnover (sales/assets). What is the maxi..

Prepare the entries that would be recorded : On December 31, 2014, Oakbrook Inc. rendered services to Beghun Corporation at an agreed price of $121,693, accepting $47,700 down and agreeing to accept the balance in four equal installments of $23,850 receivable each December 31. Prepare the entri..

What is your average tax rate and marginal tax rate : It is April 14, 2016. You are Madelyn Mooney (SS# 789-14-6395), you graduated from University in 2010 and you are now the Marketing Director for Rottweiler, Inc. in Millvale, New York. You make $45,000 per year. Using 2015 tax rates (Google them), f..

Prepare the journal entry to record bad debt expense : Prepare the journal entry to record bad debt expense assuming Riverbed Company estimates bad debts at (a) 4% of accounts receivable and (b) 4% of accounts receivable but Allowance for Doubtful Accounts had a $1,570 debit balance.

Prepare an income statement for the year : Two accountants for the firm of Elwes and Wright are arguing about the merits of presenting an income statement in a multiple-step versus a single-step format. The discussion involves the following 2017 information related to Martinez Company ($000 o..

User Account

All Pages