Question
A company has stores in different countries. The CEO is not sure about the profitability of three stores. The following table includes the revenues and
A company has stores in different countries. The CEO is not sure about the profitability of three stores. The following table includes the revenues and costs of these three stores in the year ended (in euros) :
Paris | Vienna | Dublin | |
Sales revenue | 300 000 | 500 000 | 750 000 |
Cost of sales | 225 000 | 380 000 | 620 000 |
Store fixed costs | 40 300 | 68 300 | 135 000 |
Allocated head office costs | 36 000 | 45 000 | 50 000 |
Should any of the stores be closed as soon as possible? Choose the appropriate decision for each store on the assumption that closing one store will not affect any other stores and total head office costs would not decrease if any of the stores were closed.
1) Paris
close or continue
2) Vienna
close or continue
3) Dublin
close or continue
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