A restaurant manager is looking to increase both the restaurant’s profit margin and return on equity (ROE). The restaurant is small and is already operating at capacity. Which decision would the manager make to increase both metrics in the next 30 days?

While upgrading kitchen equipment could potentially improve efficiency and reduce costs in the long term, it requires an initial investment and may not yield immediate results. The increase in efficiency might not translate into higher profit margins within the 30-day timeframe, making this option less favorable for quick gains.

Purchasing inventory at a discount may lead to immediate cost savings, but it does not guarantee an increase in profit margins or return on equity. If the low-profit menu items remain on the menu, any savings from bulk purchasing may not significantly impact overall profitability or financial performance in the short term.

Relocating to a larger space could ultimately increase revenue potential, but it involves significant costs and time associated with moving, renovations, and potential downtime. This long-term strategy does not address the immediate need for increased profits and ROE within the next 30 days.