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The South End bookstore has an annual profit of $370,000. The owner may open a new bookstore by leasing an existing building for 5 years
The South End bookstore has an annual profit of $370,000. The owner may open a new bookstore by leasing an existing building for 5 years with an option to continue the lease for a second 5- year period. If he opens "The North End, " it will take $1, 200,000 of store fixtures and inventory. He believes that the two stores will have a combined profit of $560,000 a year after all the expenses of both stores have been paid. The owner's economic analysis is based on a 5- year period. He will be able to recover $1,000,000 at the end of 5 years by selling the store fixtures and moving the inventory to The South End. Construct a choice table for interest rates from 0% to 100%. If The North End is opened, what rate of return can he expect
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