Roma and Correl

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Module 3 – Assignment 5 Practice Case Examination Additional Information (Time Allowed: 4 hours) Notes: i) ii) iii) iv) Candidates must not identify themselves in answering the question. All answers must be written on official answer sheets or in official electronic files. Work done on the question paper or on the Backgrounder will NOT be marked. Included in the examination envelope is a standard supplement consisting of formulae and tables that may be useful for answering the question. Examination materials MUST NOT BE REMOVED from the examination writing centre, except for the Instruction Sheet to Electronic Exam Writers, if applicable. All used and unused answer sheets, working papers, Backgrounder, Additional Information, the…show more content…
Each option gives RCFL the right to purchase the designated parcel of land for an additional $550,000 before January 1, 2012, at which time the options will lapse. Plante acknowledged that opening new restaurants would increase RCFL’s income but questioned the feasibility of opening 12 new outlets over the next year without any Page 2 (8 pages) CMA Canada Practice Case Examination – M3A5 Additional Information financing from EFL. She wondered whether it was possible to achieve EFL’s targets by opening only Roma or only Corral outlets. Prosad Singh also reported that his marketing manager had recently confirmed the new loyalty points program which had been launched in early fiscal 2011 was turning out to be very successful. Singh reminded everyone that the program is available through all the restaurants (and the coffee shops, if the plan proceeds). Customers earn one point for every $10 spent. The points are accumulated and the customer can then redeem the points on meals in the restaurants. The redemption is as follows: 100 points represent $5. So the value of each point is $0.05 for future purchases. At June 30, 2011, customers had accumulated about 20 million points which translates into a future obligation to redeem the points worth $1,000,000 (5 cents per point). The adjustment for this loyalty points program has not yet been made on the 2011

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