O'Mally Department Stores Is Considering Two Possible Expansion Plans

question 87

Multiple Choice

O'Mally Department Stores is considering two possible expansion plans. One proposal involves opening 5 stores in Indiana at the cost of $1,810,000. Under the other proposal, the company would focus on Kentucky and open 6 stores at a cost of $2,000,000. The following information is available: The accounting rate of return for the Indiana proposal is closest to (Round any intermediary calculations to the nearest dollar, and round your final answer to the nearest hundredth of a percent, X.XX%.)

• A)23.67%.
• B)22.74%.
• C)38.67%.
• D)34.25%.

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Definitions:

Marginal Utility

The increased enjoyment or advantage derived by a consumer from the consumption of an extra unit of a good or service.

Lemonade

A beverage typically made from lemon juice, water, and sugar.

Marginal Utility

The additional satisfaction gained from consuming one more unit of a good or service.

Market Basket

A set of goods and services used to represent what is consumed by a typical consumer for the purpose of measuring inflation or cost of living.