The Area Manager of the Red, White, and Brew Restaurants

question 2

Multiple Choice

The area manager of the Red, White, and Brew Restaurants is considering two possible expansion alternatives. The required investments, expected controllable margins, and the ROIs of each are as follows: $\begin{array}{lllr}\text { Project } &\text {Investment } &\text {Controllable Marain } &\mathrm{RO}\\\text { Phoenix } & \$ 120,000 & \$ 30,000 & 25 \% \\\text { Chicago } & \$ 540,000 & \$ 50,000 & 9.25 \%\end{array}$ The Red, White, and Brew segment has currently $2,000,000 in invested capital and a controllable margin of $250,000. Which one of following projects will increase the Red, White, and Brew division's ROI?

• A)Both the Phoenix and Chicago options
• B)Only the Phoenix option
• C)Only the Chicago option
• D)Neither the Phoenix nor the Chicago options

---

Definitions:

Computerized Accounting Systems

Systems that use software to record, store, and process financial transactions and data, improving efficiency and accuracy in accounting.

Business Segments

Distinct parts of a company that deal with different types of products or services, often reported separately in financial statements.

B2C

Stands for "Business to Consumer," describing transactions conducted directly between a company and consumers who are the end-users of its products or services.

Special Journals

Special journals are accounting journals designed for recording and detailing types of financial transactions that occur frequently within a business, such as sales, purchases, cash receipts, and cash disbursements.