Williams Department Stores Is Considering Two Possible Expansion Plans -The Accounting Rate of Return for the Kentucky Proposal Is

question 64

Multiple Choice

Williams Department Stores is considering two possible expansion plans.One proposal involves opening 5 stores in Indiana at the cost of $1,800,000.Under the other proposal,the company would focus on Kentucky and open 6 stores at a cost of $2,400,000.The following information is available: $$\begin{array} { | l | l | l | } \hline & \text { Indiana proposal } & \text { Kentucky proposal } \\\hline \text { Required investment } & \$ 1,800,000 & \$ 2,400,000 \\\hline \text { Estimated life } & 10 \text { years } & 10 \text { years } \\\hline \text { Estimated residual value } & \$ 50,000 & \$ 80,000 \\\hline \begin{array} { l } \text { Estimated annual cash inflows over } \\\text { the next 10 years }\end{array} & \$ 400,000 & \$ 500,000 \\\hline \text { Required rate of return } & 10 \% &10\% \\\hline\end{array}$$
-The accounting rate of return for the Kentucky proposal is closest to:

• A)10.83%.
• B)11.17%.
• C)12.50%.
• D)20.83%.

Recognize the importance and structure of bylaws in corporate governance.

Understand working capital management and its significance.

Learn about the primary and secondary financial markets.

Comprehend the concept and impact of regulatory dialectic on financial institutions and corporations.

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Definitions:

Functional Authority

Functional authority is the right granted to individuals based on their expertise in specific areas, allowing them to direct activities within their domain of expertise.

Advisory Authority

The power to give advice and recommendations without having the authority to mandate actions.

Matrix Structures

Organizational design combining two or more types of structures, typically combining functional and project-based divisions to enable more flexible and responsive operations.

Social Network Analysis

A methodological approach to study the relationships and structures within a network of individuals, organizations, or systems, using graph theory to visualize connections.