Starbucks has $1 billion to invest. It can either purchase a rival coffee shop chain or build additional Starbucks shops. If Starbucks chooses to purchase the rival chain, what does that say about the relative profitability of purchasing and owning the rival's existing shops versus building additional Starbucks shops? Explain.

Answers

Answer 1

Answer:

Investment decisions are made on the margin. This means that Starbucks' executives calculated that purchasing the rival coffee chain would yield a higher marginal return for every dollar invested than opening more of their own Starbucks shops. The investment that yields the highest marginal return per dollar investment will be made.

Related Questions

Rodgers Company gathered the following reconciling information in preparing its May bank reconciliation. Calculate the adjusted cash balance per books on May 31.
Cash balance per books, May 31 $3,457
Deposits in transit 131
Notes receivable and interest collected by bank 853
Bank charge for check printing 47
Outstanding checks 1,567
NSF check 180
a. $3,816.
b. $2,730.
c. $1,195.
d. $1,979.

Answers

Answer:

$4,083

Explanation:

Preparation of the Adjusted Cash Balance per Books on May 31

Adjusted Cash Balance per Books on May 31

Cash Balance per Books on May 31 $3,457

Add Notes Receivable and Interest Collected by Bank $853

Less Bank Charge for Check Printing ($47)

Less NSF Check ($180)

Adjusted Cash Balance per Books on May 31 $4,083

Therefore the Adjusted Cash Balance per Books on May 31 will be $4,083

Why are short sentences and short paragraphs appropriate for business communication?

Answers

Answer:

Objs. 4 For business communications it is essential to express ideas and facts eloquently. The shorter the sentences and paragraph are, the brief the letter, memo or notice. This will save the reader's and writer's time.

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