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The owner of a restaurant serving Middle Eastern cuisine realizes the need for a bigger location due to extreme customer congestion. He is contemplating moving the restaurant to a new location that would require $255,000 of renovations in order to keep pace with his growing consumer base. Students are asked to: 1) identify those items relevant to the decision and categorize them as either recurring or one-time flows; 2) understand that recurring flows consist of both fixed and variable costs; 3) identify investments, including working capital accounts; 4) calculate return on investment and 5) make a decision based on both qualitative and quantitative analysis.

The partners of a small jewelry design company have decisions to make regarding distribution alternatives for their products. Students are asked to: 1) identify those items relevant to the decision and categorize them as investment, fixed costs, or variables; 2) calculate the unit contribution and contribution margin for each necklace and earring set at both wholesale and retail selling price points; 3) calculate the weighted-average-contribution margin for each of the two product lines; 4) perform a breakeven analysis and identify what information would be useful in the interpretation of these breakeven levels and 6) project the profitability of both distribution strategies and perform sensitivity analysis around the expected sales levels.