More than $60 billion was spent on pets in the United States in the most recent year. A Most of the revenue was allocated in two areas, with food and supplies making up The owners of Pawstore want to maintain control and prevent a possible takeover 64 percent of the total, and care and housing making up another 24 percent. The from publicly held competitors. Given the NPV presented in the analysis, the most industry's retailers are divided into two categories, specialty stores and large retail appropriate approach to the expansion plan is to chain stores. Recent growth in overall industry revenue has averaged 5 percent annually, while growth in the sale of premium pet food and services exceeds 10 O A) finance by issuing common stock percent per annum. O B) finance by issuing debt O C) abandon the expansion plan Pawstore is a privately held specialty retailer of pet food, supplies, and services. The O D) finance by reissuing treasury stock company is planning to launch a major expansion beginning in the current fiscal year. Which of the following conditions would most likely enhance the prospects for Pawstore's revenue from merchandise is dominated by national brands of dog and Pawstore's use of equity to finance this project? cat food, representing 92 percent of its net sales for the most recent fiscal year. O A) The company anticipates an increase in is corporate tax rate. O B) The standard deviation of the project's cash flow projections has recently Pawstore aspires to enter the specialty superstore category in geographic locations decreased. not yet occupied by large competitors. The company will meet its goals for growth O C) The company's interest coverage ratio has recently increased. by building and opening new stores rather than by acquiring small operators. The O D) The price/earnings ratios of its publicly traded peers have recently increased. plan includes a significant shift into a range of luxury services, including pet spas and hotels, combined with the introduction of a line of gourmet, human-grade pet food. Which of the following will most influence the maintenance and evolution of Preliminary financial analysis includes the following. Pawstore's organizational culture? . Before moving ahead with its plan, Pawstore paid a market-research firm O A) The financial health of the company $500,000 for analysis and projections; the results of the research prompted O B) The vision and values of the CEO management's decision to proceed. O C) The manner in which employees are hired . Pawstore's CFO conducted a rigorous statistical analysis that produced a net O D) The needs and desires of consumers present value (NPV) of $3.6 million for the expansion, based on expected positive cash flows. Pawstore can best maintain the quality of its proposed products through which of the . Pawstore can finance most of the $40 million expansion cost with either a following? debt offering or a private placement of equity. ( A) Randomly inspecting products during the production process O B) Carefully monitoring any parts of its products that are outsourced The CEO realizes that the expansion will have an effect on Pawstore's organizational O C) Ensuring that quality criteria are established during planning stages culture, its vision that "every pet is a quality pet," and its marketing strategy. ( D) Implementing a robust post-production inspection processMore than $60 billion was spent on pets in the United States in the most recent year. Pawstore can best maintain the quality of its proposed products through which of the Most of the revenue was allocated in two areas, with food and supplies making up following? 64 percent of the total, and care and housing making up another 24 percent. The ( A) Randomly inspecting products during the production process industry's retailers are divided into two categories, specialty stores and large retail O B) Carefully monitoring any parts of its products that are outsourced chain stores. Recent growth in overall industry revenue has averaged 5 percent O C) Ensuring that quality criteria are established during planning stages ammually, while growth in the sale of premium pet food and services exceeds 10 ( D) Implementing a robust post-production inspection process percent per annum. Pawstore's entrance into the specialty superstore category can be best described as Pawstore is a privately held specialty retailer of pet food, supplies, and services. The company is planning to launch a major expansion beginning in the current fiscal year. O A) market penetration O B) market skimming Pawstore's revenue from merchandise is dominated by national brands of dog and O C) product specialization cat food, representing 92 percent of its net sales for the most recent fiscal year. O D) diversification Pawstore aspires to enter the specialty superstore category in geographic locations The introduction of gourmet, human-grade pet food to Pawstore's offerings is not yet occupied by large competitors. The company will meet its goals for growth considered which type of new product development? by building and opening new stores rather than by acquiring small operators. The plan includes a significant shift into a range of luxury services, including pet spas and O A) An improvement to an existing product hotels, combined with the introduction of a line of gourmet, human-grade pet food. O B) A new-to-the-world innovation Preliminary financial analysis includes the following. O C) An addition to an existing product line O D) An augmented product . Before moving ahead with its plan, Pawstore paid a market-research firm $500,000 for analysis and projections; the results of the research prompted What would be the effect of issuing long-term debt or common equity on Pawstore's management's decision to proceed. earnings per share (EPS)? . Pawstore's CFO conducted a rigorous statistical analysis that produced a net present value (NPV) of $3.6 million for the expansion, based on expected Effect of Issuance of Effect of Issuance positive cash flows. Long-Term Debt Common Equity . Pawstore can finance most of the $40 million expansion cost with either a on EPS on EPS debt offering or a private placement of equity. O A) No effect Decrease O B) Decrease Decrease The CEO realizes that the expansion will have an effect on Pawstore's organizational O C) Decrease No effect culture. its vision that "every pet is a quality pet," and its marketing strategy. O D) No effect No effect