Which of the two locations would have been more profitable? Show your calculations.

Size Rent Labour Exhibit 3 Comparison of Locations Great Eastem Building Exploits Valley Mall (downtown) 2,000 sq. ft. 800 sq. ft. $5.40 sq. ft., 5 yr. $20 sq. ft. I yr renewable 3 yr $23 sq. ft. I yr. $25 sq. ft. $5.00 per hour $5.00 per hour Set own hours 9:30-5:30 Usual 9:00-5:30 Mon,Tues, Sat2 9:30 - 9:00 Wed,Thur Fri Christmas open till 9:30 Mon - Fri Nov. 15 - Dec. 25 (approx. 8 weeks) First & Last Month First & Last Month Hours Downpayment (rent) Forecast Sales $100,000 - $120,000 $120,000 - $150,000 1 Including joint costs 2 All mall stores must observe mall hours The Fitness Factory was located in the basement of the Town Square Mall and the Powers rejected the idea of expanding here because they did not believe that they could attract the desired customers to this basement location. After reviewing the available locations Colin and Ed had narrowed their choice to two possibilities. One was a 2,000 square foot space in the Great Eastern Oil building downtown at $5.40 a square foot. The other was an 800 square foot space in the Exploit's Valley Mall. The cost here would be $20 per square foot for a 5 year lease, $23 per square foot for a 3 year lease, or $25 per square foot for a 1 year lease. Drawing on his experience and some information from Statistics Canada, Colin estimated first year sales to be between $100,000 and $150,000 depending upon the location selected and the average sale per customer. From Statistics Canada he discovered that 36% of the population was age 15 to 34 -- the group he had determined to be his primary target market. Thus he estimated that the trading area contained about 18,000 prospects (50,000 X 36%). Based on experience and estimates of pedestrian traffic he further estimated that about 3,000 of the prospects would become customers at the Exploits Valley Mall location and about 2,500 at the downtown location. At $40 to $50 per customer -another estimate - Cohn projected first year sales at the mall to be between $120,000 and $150,000 and downtown to be between $100,000 and $125,000. Size Rent Labour Exhibit 3 Comparison of Locations Great Eastem Building Exploits Valley Mall (downtown) 2,000 sq. ft. 800 sq. ft. $5.40 sq. ft., 5 yr. $20 sq. ft. I yr renewable 3 yr $23 sq. ft. I yr. $25 sq. ft. $5.00 per hour $5.00 per hour Set own hours 9:30-5:30 Usual 9:00-5:30 Mon,Tues, Sat2 9:30 - 9:00 Wed,Thur Fri Christmas open till 9:30 Mon - Fri Nov. 15 - Dec. 25 (approx. 8 weeks) First & Last Month First & Last Month Hours Downpayment (rent) Forecast Sales $100,000 - $120,000 $120,000 - $150,000 1 Including joint costs 2 All mall stores must observe mall hours The Fitness Factory was located in the basement of the Town Square Mall and the Powers rejected the idea of expanding here because they did not believe that they could attract the desired customers to this basement location. After reviewing the available locations Colin and Ed had narrowed their choice to two possibilities. One was a 2,000 square foot space in the Great Eastern Oil building downtown at $5.40 a square foot. The other was an 800 square foot space in the Exploit's Valley Mall. The cost here would be $20 per square foot for a 5 year lease, $23 per square foot for a 3 year lease, or $25 per square foot for a 1 year lease. Drawing on his experience and some information from Statistics Canada, Colin estimated first year sales to be between $100,000 and $150,000 depending upon the location selected and the average sale per customer. From Statistics Canada he discovered that 36% of the population was age 15 to 34 -- the group he had determined to be his primary target market. Thus he estimated that the trading area contained about 18,000 prospects (50,000 X 36%). Based on experience and estimates of pedestrian traffic he further estimated that about 3,000 of the prospects would become customers at the Exploits Valley Mall location and about 2,500 at the downtown location. At $40 to $50 per customer -another estimate - Cohn projected first year sales at the mall to be between $120,000 and $150,000 and downtown to be between $100,000 and $125,000