Question

Collins Food Group (CFG) owns both Sizzler and KFC in Australia. Due to Sizzler’s continuing poor performance, CFG is deciding whether or not to close the Sizzler restaurants and re-invest into KFC to continue its growth. CFG’s every three months revenues are $421,389 while Sizzler remains open, and they estimate revenues will increase to $477,888 every three months if the divestment of Sizzler goes ahead. Running costs will remain constant at $90,572 every three months in either case. The cost of the divestment of sizzler would be $102,540 over the time frame of one year. What will be CFG’s estimated accounting profits for the first three months after the divestment goes ahead? Answer number to the nearest whole number and include a negative sign if it is an accounting loss (with no decimal places, $ sign, spaces or commas).

Answer 1