Bolds Gym, a health club chain, is considering expanding into a new location: the initial investment would
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Assume that the interest rate is 10%.
(a) What is the present value profit/loss of the deal?
(b) The club is considering offering a special deal to the members in the first year. For $3,000 upfront they get a full 6-year membership (i.e., 1 year free). Would it make financial sense to offer this deal?
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