Question
Silverthorne Diner owns mountain food restaurants in Summit County. They are considering expanding into Eagle County next year. Expanding would involve opening another store, which
Silverthorne Diner owns "mountain food" restaurants in Summit County. They are considering expanding into Eagle County next year. Expanding would involve opening another store, which would be located in Vail. Without the Vail restaurant, each of the existing 8 restaurants in Summit County would be allocated annual advertising costs of $15,000. With the new store, each restaurant (including the Vail location) would be allocated $14,000. When determining the relevant net income for the new Vail restaurant, how much in annual advertising costs should be included in the analysis?
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