Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Requirement 1 abd 2 please! National Restaurant Supply, Inc., sells restaurant equipment and supplies throughout most of the United States. Management is considering adding a

Requirement 1 abd 2 please!
image text in transcribed
image text in transcribed
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 ROI 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 the line by clicking and dragging to the other end point of the line. Round ROI to 1 decimal place.) 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 ROI 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 the line by clicking and dragging to the other end point of the line. Round ROI to 1 decimal place.) ROU 25.00% 20.00% 15.00% Realized ROI 10.00% 5.00 0.00% $3,000 $3200 53.400 53.600 $3.000 $4,000 Purchase price reset

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

Computer Accounting With Peachtree Complete 2011

Authors: Carol Yacht, Peachtree Software

15th Edition

007811098X, 978-0078110986

Students also viewed these Accounting questions

Question

Demonstrate three ways of creating a culture for change. LO.1

Answered: 1 week ago

Question

Why is intrinsic motivation healthier than extrinsic motivation?

Answered: 1 week ago