National Restaurant Supply, Inc., sells restaurant equipment and supplies throughout most of the United States. Management is considering adding a machine that makes sorbet to its line of ice cream making machines. Management will negotiate the purchase price of the sorbet machine with its Swedish manufacturer Management of National Restaurant Supply believes the sorbet machine can be sold to its customers in the United States for $4,950 At that price, annual sales of the sorbet machine should be 100 units. If the sorbet machine is added to National Restaurant Supply's product lines, the company will have to invest $600,000 in inventories and special warehouse fixtures. The variable cost of selling the sorbet machines would be $650 per machine Required: 1. If National Restaurant Supply requires a 15% return on investment (ROI), what is the maximum amount the company would be willing to pay the Swedish manufacturer for the sorbet machines? Maximum allowable purchase price per machine 2. The manager who is flying to Sweden to negotiate the purchase price of the machines would like to know how the purchase price of the machines would affect National Restaurant Supply's ROI. Construct a chart that shows National Restaurant Supply's ROI as a function of the purchase price of the sorbet machine. Put the purchase price on the X-axis and the resulting ROl on the Y-axis. Plot the ROI for purchase prices between $3,000 and $4,000 per machine. (Click the Plotter tool and drag the first point you want to plot onto the grid. Continue clicking and dragging the plotter tool until you have identified all of the necessary points for this line. Round ROl to 1 decimal place.) ROI 25.00 %m 20.00 %- 15.00%- 10.00 % 5.00%- 0.00% S3,000 $3,600 s3,800 S3 200 $3 400 $4,000 Purchase price IO pazijea National Restaurant Supply, Inc., sells restaurant equipment and supplies throughout most of the United States. Management is considering adding a machine that makes sorbet to its line of ice cream making machines. Management will negotiate the purchase price of the sorbet machine with its Swedish manufacturer Management of National Restaurant Supply believes the sorbet machine can be sold to its customers in the United States for $4,950 At that price, annual sales of the sorbet machine should be 100 units. If the sorbet machine is added to National Restaurant Supply's product lines, the company will have to invest $600,000 in inventories and special warehouse fixtures. The variable cost of selling the sorbet machines would be $650 per machine Required: 1. If National Restaurant Supply requires a 15% return on investment (ROI), what is the maximum amount the company would be willing to pay the Swedish manufacturer for the sorbet machines? Maximum allowable purchase price per machine 2. The manager who is flying to Sweden to negotiate the purchase price of the machines would like to know how the purchase price of the machines would affect National Restaurant Supply's ROI. Construct a chart that shows National Restaurant Supply's ROI as a function of the purchase price of the sorbet machine. Put the purchase price on the X-axis and the resulting ROl on the Y-axis. Plot the ROI for purchase prices between $3,000 and $4,000 per machine. (Click the Plotter tool and drag the first point you want to plot onto the grid. Continue clicking and dragging the plotter tool until you have identified all of the necessary points for this line. Round ROl to 1 decimal place.) ROI 25.00 %m 20.00 %- 15.00%- 10.00 % 5.00%- 0.00% S3,000 $3,600 s3,800 S3 200 $3 400 $4,000 Purchase price IO pazijea
