Quick Coffee Shops, a chain of fast-food shops serving breakfast 24 hours a day, is considering opening a shop in Jonestown. The shop could be opened in one of two ways, either by building the shop between a west-side shopping centre and Jonestown's small university campus or by buying a vacant building on the edge of the central business district. The expected investment required in either case is \(\$ 150000\). An extensive analysis of the potential of these two locations suggests that the expected cash inflows and outflows from their operations would be very different.

As a location, the central business district would have a much greater volume of customers than the west-side location for at least five years. This volume would be concentrated between 6 a.m. and 11.30 p.m., allowing considerable savings in wages during the early-morning hours. The volume of the west-side location would be smaller and more uniform throughout the day and night.

The costs of upkeep for the new west-side building should be considerably less than for the older building in the central business district, however. A highway currently under construction 100 kilometres to the north is expected eventually to come through Jonestown within three blocks of the west-side location after five or more years, considerably increasing the potential volume of customers to that shop. Required:

Assume that you are a consultant to Quick Coffee and have been assigned to make a recommendation to the business about what to do in Jonestown. Write a memo to the CEO describing the approach that should be used to make this decision, listing the important factors that you expect to influence the decision, and requesting specific information you will need to evaluate the decision alternatives.