Deliverable Three Short Essay Questions to Answer and Submit to Instructor
You are to submit an individual one to two page report via Blackboard answering the following from an accounting perspective, not a marketing/management perspective:
- If a person steals one of the high profit margin items, how many more does Starbucks have to sell to make up the cost of the stolen item? How many for the lowest profit margin item?
- Starbucks has many fixed assets in its stores. For example, they have various machines to make drinks or cook food. Identify one of those pieces of equipment, conduct internet research to estimate a replacement cost if it were destroyed today, assuming it is January 1st (cost). How many years do you estimate it will be functional and useful to help Starbucks produce revenue (estimated usefule life)? In that time period in the future, how much do you think Starbucks can sell it for (salvage value)? Once you have the cost of a machine, an estimated useful life and a salvage value, calculate first year. Extrapolate your results over all Starbucks stores and determine the affect on the balance sheet and income statements by comparing if the item were to be depreciated using the straightline verse double-declining balance methods, over the estimated cost, estimated useful life and estimated salvage values you choose. To answer this question, you may have to conduct research to determine the make/model machines they use. out, use a close substitute.
- From everything you read, analyzed and understand to date about Starbucks, what would you change that would help it increase revenue, control its expenses, or make its assets more efficient? Show how that beneficial change would affect at least one ratio.