If the Cost of Capital Is 10%, What Is the Net

question 8

Multiple Choice

If the cost of capital is 10%, what is the net return on investment?

• A) 10%
• B) 5%
• C) 12%
• D) None of the above

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Definitions:

Earnings

The amount of money that an individual or corporation receives in exchange for providing a good, service, or through investing capital.

Salaried Manager

An employee who receives a fixed amount of remuneration from their employer at regular intervals, typically monthly or annually, and often occupies a supervisory or managerial position.

Industrious Franchisee

A franchisee who demonstrates exceptional dedication and work ethic in managing and growing their franchised business.

Franchised Restaurant

A restaurant that operates under the branding and operational guidelines of a larger chain, typically through a licensing agreement.