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You own a car dealership and are trying to decide how to configure the showroom floor. The floor has 2000 square feet of usable space.

You own a car dealership and are trying to decide how to configure the showroom floor. The floor has 2000 square feet of usable space. You have hired an analyst and asked her to estimate the NPV of putting a particular model on the floor and how much space each model requires:

Model

NPV

Space Requirement (sq. ft.)

MB345

$2,500

200

MC237

$4,000

250

MY456

$3,500

240

MG231

$1,800

150

MT347

$8,000

450

MF302

$2,000

200

MG201

$2,000

150

In addition, the showroom also requires office space. The analyst has estimated that office space generates a NPV of$14

per square foot. What models should be displayed on the floor and how many square feet should be devoted to office space?

Add an PI( profitable index) column and figure out the answers.

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