Question
Sam Hutchins is planning to operate a specialty bagel sandwich kiosk but is undecided about whether to locate in the downtown shopping plaza or in
Sam Hutchins is planning to operate a specialty bagel sandwich kiosk but is undecided about whether to locate in the downtown shopping plaza or in a suburban shopping mall. Based on the following data, which location would you recommend?
Location | Downtown | Suburban |
Annual rent, including utilities | $10,500 | $6,750 |
Expected annual demand (sandwiches) | 42,500 | 26,000 |
Average variable costs per sandwich | $1.40 | $1.25 |
Average selling price per sandwich | $3.35 | $2.80 |
Expected annual profits from the Downtown location are $_______(Enter your response as an integer.)
Expected annual profits from the Suburban location are $_____ (Enter your response as an integer.)
Therefore, the ______location should be recommended.
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