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Ohio Electronics Stores is planning to sell its Rolla, Poplar Bluff, and Wentzville stores. The firm expects to sell each of the 3 stores for
- Ohio Electronics Stores is planning to sell its Rolla, Poplar Bluff, and Wentzville stores. The firm expects to sell each of the 3 stores for same, positive cash flow of $D. The firm expects to sell its Rolla store in N years, its Poplar Bluff store in N years, and its Wentzville store in Z years. The cost of the capital for the Rolla and Poplar store is L percent and the cost of capital for the Wentzville store is R percent. We know that N>z>0 and L>R>0. The cash flows from the sales are the only flows associated with the various stores. Based on the information in the preceding paragraph, which one of the assertions is true?
- The Wentzville store is the most valuable of the 3 stores
- Two of the 3 stores have equal value and those 2 stores are more valuable than the 3rd store or all 3 stores have the same value
- The Poplar Bluff store is more valuable of the 3 stores
- The Rolla store is the most valuable of the 3 stores
- Cannot be determined based on the information.
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