MoviePlex, Inc., has giant movie theatre complexes in Houston, Atlanta, and Seattle. Each location is run independently, with the head office located in Atlanta. The three complexes are similar in size, with 12 screens each. The Seattle location is only a year old, the Atlanta location 3 years old, and the Houston location is 6 years old. The head office uses ROI to evaluate financial performance. The following table presents their performance for a recent year.

MoviePlex, Inc., uses 10% as the required rate of return. It also depreciates its assets based on straight-line depreciation (assume that the amount for depreciation has stayed the same for the past six years).

Required:
a. Prepare a table with the three locations as rows. The four columns contain ROI and RI, each calculated using net book value and gross book value.
b. Discuss the effect of the measure and the choice of how to value investments on the ranking of the threelocations.

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Variabl Fixed Costs Invested Capital Annual Houston 8,500,000 S2, 800,000 2400,000 Adanta Seattle Costs incl depreciation) (net book vale) Depreciation S18,000,000 S1,200,000 2,200,000 21000.000 1,300,000 2.500,000 27.000.000 1.400.000 ,300,000 2,600,000 8.650.000 2.250.000