Lets take moment and look at medical needs since COVID-19 has changed what we think...
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Lets take moment and look at medical needs since COVID-19 has changed what we think of as normal life. Normally when we get sick, we take for granted that we can go to the doctor and all supplies and medicine needed are right at our finger tips. We have seen that change recently. Walgreens bought USA Drugs in 2012 and Rite Aid in 2015. What if they decided to expand and buy smaller mom and pop pharmacies? Lets say they had a WACC of 11%. The mom-and-pop pharmacies they are planning to undertake would provide a ROR of 15% but you do not think that this project is a good investment for Walgreens. What logical argument would you use to persuade Walgreens to decline the project despite the high rate of return? Before you dive into this, I know a few students have a hard time with this discussion.
What is the ROR and explain what your company should do and why.
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