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Problem One Yummy's is a restaurant chain operating in select cities in the Carolinas. Select financial data is presented below to provide you with the
Problem One | ||||
Yummy's is a restaurant chain operating in select cities in the Carolinas. Select financial data is presented | ||||
below to provide you with the necessary content for perfromance evaluation purposes. | ||||
Charlotte | Greenville | Columbia | ||
Restaurant | Restaurant | Restaurant | Total | |
Sales revenue | 3,185,000 | 1,400,000 | 1,200,000 | 5,785,000 |
Variable costs | 995,000 | 375,000 | 310,000 | 1,680,000 |
Fixed costs | 1,680,000 | 725,000 | 650,000 | 3,055,000 |
Operating income | 510,000 | 300,000 | 240,000 | 1,050,000 |
Interest costs on long-term debt at 10% | 450,000 | |||
Income before income taxes | 600,000 | |||
Income taxes at 30% | 180,000 | |||
Net income | 420,000 | |||
Net book values at the end of 2016: | ||||
Current assets | 660,000 | 500,000 | 400,000 | 1,560,000 |
Long-term assets | 2,340,000 | 1,500,000 | 600,000 | 4,440,000 |
Total assets | 3,000,000 | 2,000,000 | 1,000,000 | 6,000,000 |
Current liabilities | 300,000 | 150,000 | 50,000 | 500,000 |
Long-term debt | 4,500,000 | |||
Stockholders' equity | 1,000,000 | |||
Total liabilities and stockholders' equity | 6,000,000 | |||
Requirement Three: | ||||
Calculate ROI for each of the three again, but | ||||
assume sales increase by 10% for each one. | ||||
Assets and fixed costs remain the same as presented. | ||||
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