Question
The ABC Development Company was selected to manage a major new mall. This mall would be surrounded by a large, medium-income residential neighborhood composed of
The ABC Development Company was selected to manage a major new mall. This mall would be surrounded by a large, medium-income residential neighborhood composed of private homes and townhouses ranging from $350,000 to $1,000,000. In order to select the appropriate store type that would be successful in this area, management researched the profitability of different types of stores. The following information was collected:
Year Department Stores
Profits this year: $1,580,722
Profits last year: $1,470,655
Profits to sale this year 3.5%
profits to sale last year: 3.3%
Mass Merchandisers
Profits this year$2,033,300
Profits last year$1,896,700
Profits to sale this year 2.8%
Profits to sale last year 2.8%
Specialty Stores
Profits this year $568,774
Profits last year $555,579
Profits to sale this year 4.4%
Profits to sale last year 4.4%
Discounters
Profits this year $432,774
Profits last year $335,336
Profits to sale this year 3.4%
Profits to sale last year 3.4%
Off-price Stores
Profits this year $32,073
Profits last year $24,143
Profits to the sale this year 5.4%
Profits to sale last year 5.4%
Miscellaneous
Profit this year $461,537
Profit last year $478,326
Profits to sale this year 2.3%
Profits to sale last year 2.3%
Total
Profit this year $5,109,180
Profit last year $4,760,739
Profit to sale this year 3.0%
Profit to sale last year 3.0%
a. Calculate the dollar profit percentage change from this year to last year.
b. Calculate the net sales for last year and this year.
c. Which store type had the most significant profit change?
d. What store type would you recommend? Why?
e. Discuss the possible causes of profit percentage change from last year to this year.
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