Instructions Sally owns the East End Pizza Shop. She has been so busy and successful; she wants to open a second store called the West End Pizza Shop. She has lined up investors and a bank loan but before she signs on the dotted line, she is going to crunch some numbers. Here is the information that she has compiled: - The cost of the new store's building is $200,000 - The cost of new pizza ovens is $12,000 - She will have to spend $50,000 to renovate the new building - Sally wants to own the new shop for 5 years at which time she will close up and retire in Florida. In 5 years she expects to sell her business for $215,000 - She expects to be able to sell 4,000 pizzas in the first year and 5% more pizzas each subsequent year - The price of a pizza is $15.00 and costs $4.50 to make - On average she sells 3.2 cans of pop with every pizza - The price of a can of pop is $2.00 and costs $0.75 from the supplier - Her electricity bill will be $500 per year - She will have to pay $20,000 per year for part-time staff - The combined required rate of return by both her investors and the bank is 12% - What is the NPV of the new shop? What is your recommendation? Should she open the new store