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b) Fishy and Chippy Ltd operates a chain of restaurants in Perth, South Australia. The head office reviewed information about two of its restaurants -
b) Fishy and Chippy Ltd operates a chain of restaurants in Perth, South Australia. The head office reviewed information about two of its restaurants - i.e. Restaurant Alpha and Restaurant Gamma (see below). Each restaurant operates as a separate stand-alone business and is designated as an investment centre. (8 marks) Required: i. Calculate the financial performance of each restaurant using both ROI and RI. Assume the firm's minimum required rate of return is 13\%. (4 marks) ii. Which restaurant performed better? Explain (2 marks) iii. Suggest two ways the poor-performing restaurant can improve its performance in the future ( 2 marks) b) Fishy and Chippy Ltd operates a chain of restaurants in Perth, South Australia. The head office reviewed information about two of its restaurants - i.e. Restaurant Alpha and Restaurant Gamma (see below). Each restaurant operates as a separate stand-alone business and is designated as an investment centre. (8 marks) Required: i. Calculate the financial performance of each restaurant using both ROI and RI. Assume the firm's minimum required rate of return is 13\%. (4 marks) ii. Which restaurant performed better? Explain (2 marks) iii. Suggest two ways the poor-performing restaurant can improve its performance in the future ( 2 marks)
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