Question 3(5 points)

The CEO of Cracker Barrel has decided that the firm needs to target customers in the 20 to 25 year old age range. So, breaking a long tradition, some locations start to offer hard liquor. Which of the following are implications for the financial statements? Select all that apply.

Question 3 options:

Older repeat customers are dismayed by the drinking and stop going; this detracts from revenues

Payment of the state alcohol tax adds to the overall tax that Cracker Barrel pays

The value of intangibles on the balance sheet declines because Cracker Barrel's brand value is negatively impacted by its association with alcohol.

Younger customers are attracted and their purchases add to revenues

Revenues increase, that is all that is affected by the sale of alcohol at Cracker Barrel locations.

The cost of insurance increases to cover liability from drunks