Accounting Plaza Bistro is a restaurant and bar business in the northern suburbs. The Bistro has acquired a large base of loyal customers and established a name for itself during its 15 years of operation. Unfortunately, due to the effect of the pandemic, the owner can no longer sustain the business and it has to be put on sale.Adrian has been in the restaurant business for many years and is interested to buy Plaza Bistro. His negotiation for buying were going well until it came to evaluating the value for Inventory Ordering System (IOS). Adrian reasons that the IOS is not worth much as it is an old version, but the owner insists that the system has been routinely maintained and all problems have been fixed during its many years of trial run, making it very efficient and an essential part of the business. 1) Advise Adrian of two approaches (measurements) that can be used to evaluate the Inventory Ordering System (IOS). 2) Suggest what information (in three examples) Adrian should search for to find the value which would inform his choice of the approaches.
Accounting Plaza Bistro is a restaurant and bar business in the northern suburbs. The Bistro has acquired a large base of loyal customers and established a name for itself during its 15 years of operation. Unfortunately, due to the effect of the pandemic, the owner can no longer sustain the business and it has to be put on sale.Adrian has been in the restaurant business for many years and is interested to buy Plaza Bistro. His negotiation for buying were going well until it came to evaluating the value for Inventory Ordering System (IOS). Adrian reasons that the IOS is not worth much as it is an old version, but the owner insists that the system has been routinely maintained and all problems have been fixed during its many years of trial run, making it very efficient and an essential part of the business. 1) Advise Adrian of two approaches (measurements) that can be used to evaluate the Inventory Ordering System (IOS). 2) Suggest what information (in three examples) Adrian should search for to find the value which would inform his choice of the approaches.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Accounting
Plaza Bistro is a restaurant and bar business in the northern suburbs. The Bistro has acquired a large base of loyal customers and established a name for itself during its 15 years of operation. Unfortunately, due to the effect of the pandemic, the owner can no longer sustain the business and it has to be put on sale.Adrian has been in the restaurant business for many years and is interested to buy Plaza Bistro. His negotiation for buying were going well until it came to evaluating the value for Inventory Ordering System (IOS). Adrian reasons that the IOS is not worth much as it is an old version, but the owner insists that the system has been routinely maintained and all problems have been fixed during its many years of trial run, making it very efficient and an essential part of the business.
1) Advise Adrian of two approaches (measurements) that can be used to evaluate the Inventory Ordering System (IOS).
2) Suggest what information (in three examples) Adrian should search for to find the value which would inform his choice of the approaches.
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