Nunez Corporation runs two convenience stores, one in Connecticut and one in Rhode Island. Operating income for each store in 2017 is as follows: (i) (Click the icon to view the add-or-drop (Click to view the operating income for the stores.) segments information.) Read the requirements. Data table More info The equipment has a zero disposal value. In a senior management meeting, Maria Lopez, the management accountant at Nunez Corporation, makes the following comment, "Nunez can increase its profitability by closing down the Rhode Island store or by adding another store like it." Requirement 2. Calculate Nunez's operating income if it keeps the Rhode Island store open and opens another store with revenues and costs identical to the Rhode Island store (including a cost of $20,000 to acquire equipment with a one-year useful life and zero disposal value). Opening this store will increase corporate overhead costs by $8,000. Is Maria Lopez's statement about the effect of adding another store like the Rhode Island store correct? Begin by calculating Nunez's operating income if it keeps the Rhode Island store open and opens another store with revenues and costs identical to the Rhode Island store. (If the net effect is an operating loss, enter the amount with parentheses or a minus sign.) Nunez Corporation runs two convenience stores, one in Connecticut and one in Rhode Island. Operating income for each store in 2017 is as follows: (i) (Click the icon to view the add-or-drop (Click to view the operating income for the stores.) segments information.) Read the requirements. Data table More info The equipment has a zero disposal value. In a senior management meeting, Maria Lopez, the management accountant at Nunez Corporation, makes the following comment, "Nunez can increase its profitability by closing down the Rhode Island store or by adding another store like it." Requirement 2. Calculate Nunez's operating income if it keeps the Rhode Island store open and opens another store with revenues and costs identical to the Rhode Island store (including a cost of $20,000 to acquire equipment with a one-year useful life and zero disposal value). Opening this store will increase corporate overhead costs by $8,000. Is Maria Lopez's statement about the effect of adding another store like the Rhode Island store correct? Begin by calculating Nunez's operating income if it keeps the Rhode Island store open and opens another store with revenues and costs identical to the Rhode Island store. (If the net effect is an operating loss, enter the amount with parentheses or a minus sign.)
