Deluxxe Burgers operates four restaurants in the Washington, DC area. Use the following data to calculate ROI
Question:
Deluxxe Burgers operates four restaurants in the Washington, DC area. Use the following data to calculate ROI using the DuPont method to compare the performance of the four restaurants. Congress Heights Dupont Circle Foggy Bottom Georgetown Current Assets $ 1,650,000 $ 1,815,000 $ 1,850,000 $ 1,900,500 Long-Term Assets $ 1,900,000 $ 2,125,000 $ 1,600,000 $ 1,760,000 Total Assets $ 3,550,000 $ 3,940,000 $ 3,450,000 $ 3,660,500 Monthly Sales $ 1,000,000 $ 1,250,000 $ 1,250,000 $ 1,250,000 Target ROI 11% 12% 10% 13% Fixed Costs $ 800,000 $ 700,000 $ 800,000 $ 750,000 Variable Operational Costs (per $100,000 in sales) $ 3,000 $ 2,500 $ 3,250 $ 5,000 Required Rate of Return 0 12% 12% 12% ROI 5% 13% 12% 12% Residual Income $ (229,000.00) $ 74,075.00 $ 31,937.50 $ 54,490.00 Income $ 170,000 $ 518,750 $ 409,375 $ 437,500 a. What is Congress Heights' return on investment ROI using the DuPont method? B. What is DuPont Circle's ROI using the DuPont method? C. What is Foggy Bottom's ROI using the DuPont method? D. What is Georgetown's ROI using the DuPont method? E. Which location had the best performance?
Dynamic Business Law The Essentials
ISBN: 978-0073524979
2nd edition
Authors: Nancy Kubasek, Neil Browne, Daniel Herron