A Grocery Store Manager Must Decide Whether to Buy a Rug

question 162

Multiple Choice

A grocery store manager must decide whether to buy a rug cleaner to rent to customers.The cleaner costs $800.It is expected to yield $200 in income per year.What is the expected annual rate of return from the cleaner?

• A)$600
• B)$200
• C)400 percent
• D)75 percent
• E)25 percent

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Definitions:

Franchise

A license that allows the franchisee to access a business's proprietary knowledge, processes, and trademarks to allow the party to sell a product or provide a service under the business's name.

Product Development

The complete process of bringing a new product to market, from idea generation to commercialization.

GAAP

Generally Accepted Accounting Principles, a collection of commonly-followed accounting rules and standards for financial reporting.

R&D Costs

Expenses associated with the research and development of a company's goods or services, often considered an investment in a company's future.