A popular chain of tea and coffee shops, called $8$Branches, wants to open up a

new location. There are two locations under consideration: one near a local high

school and another near a local college. The high school location is expected to

draw an estimated revenue of $$475,000$ each year. The cost to build a branch at

this location is $$1\mathrm{.}75$ million. Due to the expected vandalism from the local high

school students, this location is expected to require an overhaul cost of $$50,000$

every $3$ years to clean up the interior and exterior. The college location will be

more expensive to build with an upfront cost of $$2\mathrm{.}55$ million and is expected to

only draw in $$500,000$ in revenue the first year due to a high amount of

competition in the area. The revenue is expected to grow by $$30,000$ each year

afterwards though as it gets more popular. Assume an interest rate of $7\%$ and an

analysis period of $10$ years for both options.

i$.$ Use Present Worth Analysis to determine which location $8$Branches

should build a new location.

$$ Ans: $=$ $$1485075,=$ $$1793480$

ii$.$ Use Annual Cash Flow Analysis to determine which location $8$Branches

should build a new location. Did you get the same result as part $($i$)?$

$$ Ans: $=$ $$211371\mathrm{.}32,=$ $$255260$