Treynor Pie Company is a food company specializing in high-calorie snack foods. It is seeking to diversify its food business and lower its risks. It is examining three companies-a gourmet restaurant chain, a baby food company, and a nutritional products firm. Each of these companies can be bought at the same multiple of earnings. The following represents information about all the companies. Company Treynor Pie Company Gourmet restaurant Baby food company Nutritional products company Treynor Pie Company Gourmet restaurant Baby food company Nutritional products company Correlation with Treynor Pie Company +1.0 +0.4 +0.4 -0.7 Coefficient of Variation a-2. Which company is the least risky? Traunar Din Campani O Nutritional products company O Baby food company O Gourmet restaurant Sales ($ millions) $ 170 a-1. Compute the coefficient of variation for each of the four companies. (Enter your answers in millions (e.g., $100,000 should be entered as "10"). Round your answers to 3 decimal places.) 64 53 71 Expected Earnings ($ millions) $8 5 6 Standard Deviation in Earnings ($ millions) $2.0 1.3 1.8 3.6

Google Inc. is a technology company specializing in Internet-related products and services, including its famous web search engine. Whirlpool Corp. manufactures home appliances including laundry appliances, refrigerators, and dishwashers. Google has a market - to - book ratio of 3.8. Based on your knowledge of the industries in which these two companies compete, and the determinants of the M/B ratio, would you estimate that Whirlpool's market-to - book ratio is O A. less than Google's M/B ratio of 3.8 O B. approximately equal to Google's M/B ratio of 3.8 O C. greater than Google's M/B ratio of 3.8

Hazlett & Family is organized into two geographic markets Northern and Southern. The company makes an off-road vehicle for recreation and agricultural use. The vehicle is sold in three models, depending on the power and options. The three models, from least expensive to most expensive, are the H-L, H-LX, and H-LXS. The company's financial staff has prepared the following forecasted income statement for the upcoming fiscal year (in thousands of dollars): Sales revenue Cost of goods sold Gross margin Marketing costs Administrative costs Total marketing and administrative Operating profits Management has expressed special concern with the Southern market because of the extremely poor return on sales. This market was entered a year ago because it seemed like the best opportunity for growth. Hazlett & Family knew that it would take some time to build profitability in the market, but there has been no noticeable change in the low returns over time. H-L H-LX H-LXS The financial staff has also…

Darden Restaurants, Inc. (DRI) is the largest full-service restaurant company in the world. It operates over 2,200 restaurants under a variety of brand names, including Olive Garden, Bahama Breeze, and LongHom Steakhouse. Panera Bread Company (PNRA) operates over 1,800 bakery-cafe locations across North America. It is one of the Largest fcxxl service companies in the United States. The cost of food, beverage, and packaging and the beginning and ending inventory balances from recent annual reports for Darden and Panera are as follows (in millions): a. Compute the inventory turnover for both companies. Round calculations to one decimal place.b. Compute the number of days' sales in inventory for Ixith companies. Round calculations to one decimal place.C. Which company is more efficient in managing inventory?d. What might explain the difference in the inventory management efficiency of the two companies?

Allocate the corporate costs to each region and calculate the income of each region after assigning corporate costs.

Wonkies, Inc. is a large company that owns fast-food restaurants, has a soft drink division, and a snack division. Wonkies, Inc. corporate management gives its division managers considerable operating and investment autonomy in running their divisions. Wonkies, Inc. is considering how it should compensate Mark Hamm, the general manager of the snack division. ■ Proposal 1 calls for paying Hamm a fixed salary. ■ Proposal 2 calls for paying Hamm no salary and compensating him only on the basis of the division’s RI, calculated based on operating income before any bonus payments. ■ Proposal 3 calls for paying Hamm some salary and some bonus based on RI. Q. Wonkies, Inc. competes against Galaxy Industries in the snack business. Galaxy is approximately the same size as the Wonkies snack division and operates in a business environment that is similar to Wonkies. The top management of Wonkies, Inc. is considering evaluating Hamm on the basis of his snack division’s RI minus Galaxy’s RI. Hamm…

Ellis Island Tropical Tea, launched by entrepreneur Nailah Ellis-Brown as described in this chapter’s opener, makes Jamaican sweet tea from all-natural ingredients. Required 1. Identify at least two fixed costs that do not change regardless of how much tea Nailah’s company sells. 2. Ellis Island Tropical Tea is growing. How could overly optimistic sales estimates hurt Nailah’s business? 3. Explain how cost-volume-profit analysis can help Nailah manage her company.

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Analyze El Pollo Loco Holdings, Inc. El Pollo Loco Holdings, Inc. (LOCO), Spanish for “The Crazy Chicken,” operates almost 500 restaurants, approximately 40% of which are company-owned and the rest are franchises. El Pollo Loco combines the culinary traditions of Mexico and California, creating unique menu items such as their signature Chicken Avocado Burrito. The company aims to improve profitability, in part, by simplifying operations to make it easier for employees and franchisees to run the restaurants. Recent data (in millions) for company-operated and franchised restaurants are as follows: Line Item Description Company-Operated Franchised Revenues $374 $29 Operating income 62 1 Invested assets 79 2 a. Determine the profit margin for each segment. Round to one decimal place. Line Item Description Profit margin Company-Operated fill in the blank 1% Franchised fill in the blank 2%   b. Determine the investment turnover for each segment. Round to two decimal…

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