Required:
1.Prepare a schedule showing the change in revenues and expenses and the impact on the overall company net operating income that would result if the Downtown Store were closed. (Input all amounts as a positive values. Do not round intermediate calculations. Omit the “$” sign in your response.)
2. Based on your computations in (1) above, what recommendation would you make to the management of Thrifty Markets, Inc.?
3.Assume that if the Downtown Store were closed, sales in the Uptown Store would increase by $200,000 per quarter due to loyal customers shifting their buying to the Uptown Store. The Uptown Store has ample capacity to handle the increased sales, and its gross margin is 43% of sales.
a. Calculate the Net advantage of closing the Downtown Store. (Negative amount should be indicated by a minus sign. Omit the “$” sign in your response.)
b. What recommendation would you make to the management of Thrifty Markets, Inc.?
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