Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Business Management Expert

Tam Burger has opened more than 200 stores in past five years; 80% of which are franchised (independently owned). Two of the company-operated units, Northside and Southside, are among fastest-growing stores. Both are thinking of expanding their menus to comprise pizza. Installation of essential ovens and purchase of essential equipment would cost $180,000 per store.

Current investment in Northside store totals $890,000; its revenues are $1,100,500 and expenses are $924,420. Expansion of Northside's menu must increase profits by $30,600.

Current investment in Southside store totals $1,740,000, its revenues are $1,760,800 and expenses are $1,496,680. Adding pizza to Southside's menu must increase its profits by $30,600 also.

Tam Burger estimates its managers based on return on investment. Managers of individual stores have responsibilities over pizza expansion.

a. Compute return on investment for both stores of using present numbers for expansion project and for stores after expansion. (hint: set answer up as ROI before pizza; ROI of pizza only; and ROI after pizza.)

b. Suppose a 14% cost of capital, compute residual income for both stores before and after potential expansion.

c. Will Tam Burger stores select to expand? How would the answer change if stores were franchised units and possessed by value-maximizing investors?

Business Management, Management Studies

  • Category:- Business Management
  • Reference No.:- M931455

Have any Question? 


Related Questions in Business Management

In 2-3 paragraphs explain the purpose of an organizational

In 2-3 paragraphs, explain the purpose of an organizational chart and what it accomplishes for a healthcare organization.  Discuss the limitations of what an organizational chart communicates and how an organizational ch ...

1 what do story points represents in an agile project how

1. What do story points represents in an Agile project? How do they aid in project monitoring and control? 2. What might such a spreadsheet look like in helping you predict the project finish date?

Assignmentanswer one of the essay questions located at the

Assignment Answer one of the Essay Questions located at the end of chapters 1-4 in Introduction to Business Law. Answer one question for each chapter. Each fully developed response (250-400 words) should include the foll ...

To configure performance monitor efficiently it takes some

To configure performance monitor efficiently, it takes some understanding. What resources do you have available to you to learn more about the tool?

Decision making gone awrysometimes social influences and

Decision Making Gone Awry Sometimes social influences and societal pressures can influence decision making for the better and sometimes for the worse. In addition to these pressures, there are risks that need to be evalu ...

Do you believe having highly detailed job descriptions for

Do you believe having highly detailed job descriptions for every position can interfere with group effectiveness? If so, is there anything that can be done to avoid this?

What is the payoff for a put option with a strike price of

What is the payoff for a put option with a strike price of $50 if the stock price at expiration is $65? Please provide detail of how you got your answer

The panama canal is undergoing a major widening as a port

The Panama Canal is undergoing a major widening. As a port owner/administrator what would you do to create a competitive advantage as a result of the widening and the post-Panamax hulls? To be able to create a competitiv ...

Assignmentconduct research to locate an example of a

Assignment; Conduct research to locate an example of a business issue in the past five years for which decision analysis could have proved beneficial. Share the details (no more than 1 page) and analyze the situation bas ...

Somewhere right now hackers are researching systems and

Somewhere, right now, hackers are researching systems and developing new exploits to defeat security controls. Through their efforts, they may gain a deeper understanding of system and network vulnerabilities. Therefore, ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen