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Scenario 5.2 Use the Following to Answer the Questions

question 8

Multiple Choice

Scenario 5.2
Use the following to answer the questions.
Colin Jackson recently purchased Blue Waters Adventures,a kayak and canoeing rental business near the Chatsworth River in Arizona.Blue Waters Adventures had been in operation for five years and was located in an ideal area.Even though the winters in the area can be cold,kayaking and canoeing activities are generally popular year-round.After two months of operation,it became clear why the previous owners had sold the business.While the business appeared to be ideally located,sales were extremely disappointing.
-Refer to Scenario 5.2.Colin went to the university library and collected everything he could find on the kayaking and canoeing sports industries.He found a significant amount of information,but it didn't seem to be in the format that he could actually use in his analysis.Colin realized that he could just use this preliminary data as a resource to help him design his plan for utilizing focus groups and possibly for designing a survey.The preliminary data is referred to as _____,while the data from focus groups and surveys is ______.

Definitions:

Residual Income

Residual income is the amount of net income generated in excess of the minimum rate of return. It's often used to assess the performance of business units.

Invested Assets

Resources or funds that have been allocated for investment purposes in various types of assets, such as stocks, bonds, or real estate, aiming for potential returns.

Investment Turnover

A measure of a company's efficiency in using its investments to generate sales, usually calculated as sales divided by average invested assets.

Return On Investment

A measure used to evaluate the efficiency or profitability of an investment, calculated by dividing net profit by the cost of the investment.