National Restaurant Supply, Incorporated, sells restaurant equipment...

70.2K

Verified Solution

Question

Accounting

image
image
image
National Restaurant Supply, Incorporated, sells restaurant equipment and supplies throughout 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 5tates 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 (ROD), what is the maximumbimount the company would be willing to pay the Swedish manufacturer for the sorbet machines? 2. The manager is flying to Sweden to negotiate the purchase price of the machines and would like to know how the purchase price of the machines would affect National Restaurant Supply's ROI Construct a chart showing 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. Note: Click the Plotter tool and drag the first point you want to plot onto the grid. Continue the line by clicking and dregging to the other end point of the line. Round ROI to 1 decimal place. the other end point of the line. Round ROI to 1 decimal place. ruicilase pirce

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students