Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Mara has 2 carretas for selling her products in shopping centers (One carreta per location: Plaza Carolina, Plaza del Sol). Each location sells annually $245,000

Mara has 2 "carretas" for selling her products in shopping centers (One "carreta" per location: Plaza Carolina, Plaza del Sol). Each location sells annually $245,000 (Total Sales Revenues $490000 = 245000 * 2) with a 40% Gross Margin. Annually each location has salaries and related expenses of $48,000. Annual expenses for Rent and all other expenses are $54,000 for each location.

To improve sales and profits, Maria is considering the strategy of adding a "carreta" in Plaza Las Amricas (PLA) where she expects to sell per year $305000. In PLA annual salaries and related expenses would also be $48,000, but rent and other costs would be $66000. The initial investment to start in PLA would be $25,000 (for inventory and some rent prepayments). Required Return is 20%.

What is the strategy Net Present Value (adding Plaza Las Amricas)?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Quantitative Methods For Business

Authors: David Anderson, Dennis Sweeney, Thomas Williams, Jeffrey Cam

12th Edition

840062338, 840062346, 9780840062338, 978-0840062345

More Books

Students also viewed these General Management questions

Question

How does sales stability affect the target capital structure?

Answered: 1 week ago

Question

Explain the link between positive thinking and good health.

Answered: 1 week ago

Question

Question 1 (a2) What is the reaction force Dx in [N]?

Answered: 1 week ago