Ariba ltd produces a range of ground coffee for commercial

Reference no: EM13371445

Ariba Ltd produces a range of ground coffee for commercial use within cafés and restaurants. The company is looking to extend its business and is considering bidding for the franchise to operate a coffee bar within a local shopping centre.

Research suggests that over the one-year period of the franchise, income and costs are likely to be:

Sales Revenue (£)	Probability
30,000	0.1
40,000	0.2
60,000	0.4
70,000	0.2
80,000	0.1

Variable Costs £	Probability
12,000	0.2
20,000	0.5
28,000	0.3

The franchise licence cost will be £24,000.

Required

(a) Prepare a probability distribution table and using this table, calculate the probability of:

(1) Not making a loss;

(2) Earning a profit of at least £8,000

(b) Discuss the limitation of the expected value approach to assessing the risks of taking on the franchise. What other factors should be considered by Ariba Ltd?

Reference no: EM13371445

Questions Cloud

1 two researchers are interested in examining the : 1 two researchers are interested in examining the relationship between level of education and level of volunteerism

1 using statcrunch calculate the chi-square statistic and : 1. using statcrunch calculate the chi-square statistic and degrees of freedom for the following set of data for 300

1- use a properly labelled is-lm graph to analyze and : 1- use a properly labelled is-lm graph to analyze and illustrate the effect of the following on the goods and money

Question 1 a box has 4 red and 5 blue marbles as part of an : question 1. a box has 4 red and 5 blue marbles. as part of an experiment one of the marbles is drawn at random but when

Ariba ltd produces a range of ground coffee for commercial : ariba ltd produces a range of ground coffee for commercial use within cafeacutes and restaurants. the company is

Q the issued capital of indiana ltdcomprises of 100000 : q the issued capital of indiana ltd.comprises of 100000 ordinary shares of rs. 100 each. it has no fixed interest

Part-1question1compare and contrast the ideas of semantic : part-1question1compare and contrast the ideas of semantic complexity and structural complexity of a computer program.

1- explain how a policy mix like the one used in the 1990s : 1- explain how a policy mix like the one used in the 1990s could help reduce c eliminatethe budget deficit without

1 the figure below shows domain classes for ajax a : 1. the figure below shows domain classes for ajax a role-playing videogame played in a single region that consists of

User Account

All Pages