Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Notional Restaurant Supply. Incorporated, sells restaurant equipment and supplies throughout most of the United States. Management is considering adding a machine that makes sorbet to

image text in transcribed
image text in transcribed
Notional Restaurant Supply. Incorporated, 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 manufactuter 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 seling the sorbet machines would be $650 per machine Required: 1. If National Restautant 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? 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 ROL. Construct a chart that shows National Restaurant Supplys ROI as a function of the purchase price of the sorbet machine. Put the purchase price on the X-axis and the resulting ROI on the Yaxis. Plot the ROlfor purchase prices between $3,000 and $4,000 per machine (Click the Plotter tool and drog the first point you want to plot onto the grid. Continue the line by clicking and dragging to the other end point of the line. Round ROI to 1 decimal place.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Payroll Management 2020 Edition

Authors: Steven M. Bragg

1642210366, 978-1642210361

More Books

Students also viewed these Accounting questions

Question

What is an arbitrage opportunity across time? Give an example.

Answered: 1 week ago

Question

Evaluate the importance of the employee handbook.

Answered: 1 week ago

Question

Discuss the steps in the progressive discipline approach.

Answered: 1 week ago