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9. (10) Mayfair, a retailer in the home improvement industry, currently operates six stores in Missouri and Illinois. Management is evaluating a new store in
9. (10) Mayfair, a retailer in the home improvement industry, currently operates six stores in Missouri and Illinois. Management is evaluating a new store in Chesterfield near one of its best performing stores. Mayfair already owns the land for this store, which currently has an unused storage structure on it. Several months ago, the marketing department spent $30,000 on market research to assess demand for the new store. Now Mayfair must decide whether to build and open the new store. Which of the following should be included as part of the incremental cash flow for the proposed new retail store? Explain. a. The cost of the land where the store will be located. b.The cost of demolishing the abandoned storage facility and clearing the lot. c. The loss of sales in the existing retail outlet, if customers who previously drove across town to shop at the existing outlet become customers of the new store instead. d. The $30,000 in market research spent to evaluate customer demand e. Construction costs for the new store. f.The value of the land if sold. g. Interest expense on the debt borrowed to pay the construction costs
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