This assignment is connected to the final assignment of the course. In the

same way that this course builds on the previous week, your work after this

week will provide the groundwork for your final project.

A small bookstore on Gran Via, one of the main arteries through Madrid and a

famous shopping street, has come up with the idea of delivering books to

visitors to Madrid who stay in local hotels. Given the central location of the

bookstore, the books would be delivered to tourists staying in nearby hotels

within less than $30$ minutes.

The idea for the delivery service originally came from five MBA students at IE

Business School who conducted a market study into the potential need for

such a service. From personal experience, the students knew that it is easy to

forget one's current book at home while traveling. The five MBA students

spent last summer interviewing local tourists about the desirability of such a

service. Manuel Munoz, the bookstore owner, sponsored this market study

with $1,250.$ The market study also revealed that Amazon was planning to set

up a similar delivery service in central Madrid. Due to various administrative

delays, Amazon would only be able to start its delivery service in exactly $3$

years from now. It would then immediately price Manuel's bookstore out of

the market.

The bookstore would need to buy two electrical bicycles for the delivery guys

for $1,500$ each. The two bicycles would be fully depreciated in a straight line

over the three years at a rate of $10\%.$ They could be sold for $400$ each at the$\backslash$table$[[$B$,$C$,$D$],[$Item$,\backslash$table$[[$Incremental cash$],[$flow $($Yes$/$No$)]],$Reason$],[\backslash$table$[[$Cost of the design and printing of the leaflet$],[$and the cost of the keyholders$]]],[$Cost of the two electrical bicycles$],[$Depreciation of the bikes$],[$Market study$],[$Metal shelves$],[$Rent for the storeroom$],[$Salary of the existing employee$],[$Salvage value of the bikes$],[$The erosion of the existing book sales$],[$The income from the books and their cost$],[$The salaries of the two delivery guys$],[$The tax,,$],[$Investment in net working capital,,$]]$