Youve been hired by a small accounting firm with the intent of making you manager of a new branch office. Even better, they are asking your opinion of where that new branch should be located. The current partners see opportunities in Wilmington, Jacksonville and New Bern. The state government has plans to dredge a deep harbor in Wilmington, to use the port (with the rail lines and interstate access) as a major transferal center for containerized shipping. The military bases around Jacksonville have survived the recent round of base closings. New Bern is becoming popular as a retirement community, particularly with its access to the relatively calm waters of the Sound. Along with your opinion as to where to expand, they want to know how large an office you think should be opened. You have been provided information on the local economies for each location, including an estimate of how likely it is that the economy will be growing. This data is shown in Table 1, below:

The other big (huge) issue for you is the amount of traffic you can expect, which simply means How many customers will you have? That will, of course, be affected by the local economy, but also will be affected by the size of the office you open. For the purposes of this analysis, you are considering three levels, quiet (few customers), busy (everyone in the office has work) and flood (too many customers for you to handle). The traffic (in number of customers) and probabilities for each of these under each combination of circumstances are shown in Tables 3 and 4 on the next page. To make your life simple, you have chosen to consider an average client as being worth $1,000 (net) per year. Therefore, to calculate the profit of any situation, you take the expected traffic through each site (Table 3) multiplied by the net worth to you, and minus the cost of the office building (the only cost not included in the net worth, see Table 2, below). You also estimate that a flood of customers will actually have a negative effect on your profits, so under that condition you reduce the total net worth (before subtracting off the building cost) by 25%.

Along with the financial considerations, there are other aspects to picking a location. As you consider your staff, some of whom may be single, others may be married, you must consider things such as the entertainment environment (for the single), the schools (for the married) and health care (for both). Wilmington has UNC-Wilmington, but the channel project could take a while to be finished. Jacksonville has the steadiest population base, except when a war is on. New Bern is (possibly) the prettiest, but has only one avenue for long-term growth. All of these issues are part of your decision. Finally, you have the option of buying an economic forecast for $10,000 that will predict economic conditions for eastern North Carolina. Looking at it simply, it will tell you whether the forecast is for the economy to be growing or shrinking (up or down). The forecasting group has had a growing forecast be accurate 60% of the time, while its shrinking forecasts have been accurate 65% of the time.

Yoo"ve boen hired by a small accounting firm with the intent of making you manager of a new branch office. Even better, they are asking your opinion of where that new branch should be located. The curreat partners see opnortunities in Wilmington, Jacksonville and New Bem. The state government has plans to dedge s deep harbor in Wilmsington, to une the port (with the rail lines arsd interstate access) as a major transferal eenter. foe containerized shipping. The military bases around Jacksonville have survived the tecent round of base closings. New Bem is becoming popalar as a retirement commranity. particularly with its access to the relatively calm waters of the Sound. Aloeg with yoar opinion as to where to expand, they want to know how large an office yoe think ahoald be opence. You bave been provided information on the local economies for each location, including an estimate of bow likely it is that the economy will be growing. This data is shown in Table 1, below: The otber big (huge) issue for yoa is the amount of "uaffic" you can expect, which simply means "How many customers will you have?" That will, of course, be affected by the local economy, but also will be affected by the size of the office you open. For the purposes of this analysis, you are considering three levels, quiet (few customers), busy (everyone in the office has work) and flood (too many customers for you to handie). The traffic (in number of customers) and probabilities for each of these under each combination of circumstances are shown in Tables 3 asd 4 on the next page. To make your life simple, you have chosen to consider an average elient as being worth $1,000 (net) per year. Therefore, to ealculate the profit of any situation, you take the expected traffic through each site (Table 3) multiplied by the net worth to you, and minus the cost of the office building (the only cost not included in the net worth, see Table 2 . below). You also estimate that a flood of customers will actually have a negative effect on your profits, so under that condition you reduce the total net worth (before subtracting off the building cost) by 25%. Table 3: # of Customers Wilminoton - Fonnomv IIn Wilmington - Economy Down Tackennville - Feonomv Un lacksonville - Economy Down New Rern - Economv Up New Bern - Economy Down Table 4: Probability of Traffic Volume Yoo"ve boen hired by a small accounting firm with the intent of making you manager of a new branch office. Even better, they are asking your opinion of where that new branch should be located. The curreat partners see opnortunities in Wilmington, Jacksonville and New Bem. The state government has plans to dedge s deep harbor in Wilmsington, to une the port (with the rail lines arsd interstate access) as a major transferal eenter. foe containerized shipping. The military bases around Jacksonville have survived the tecent round of base closings. New Bem is becoming popalar as a retirement commranity. particularly with its access to the relatively calm waters of the Sound. Aloeg with yoar opinion as to where to expand, they want to know how large an office yoe think ahoald be opence. You bave been provided information on the local economies for each location, including an estimate of bow likely it is that the economy will be growing. This data is shown in Table 1, below: The otber big (huge) issue for yoa is the amount of "uaffic" you can expect, which simply means "How many customers will you have?" That will, of course, be affected by the local economy, but also will be affected by the size of the office you open. For the purposes of this analysis, you are considering three levels, quiet (few customers), busy (everyone in the office has work) and flood (too many customers for you to handie). The traffic (in number of customers) and probabilities for each of these under each combination of circumstances are shown in Tables 3 asd 4 on the next page. To make your life simple, you have chosen to consider an average elient as being worth $1,000 (net) per year. Therefore, to ealculate the profit of any situation, you take the expected traffic through each site (Table 3) multiplied by the net worth to you, and minus the cost of the office building (the only cost not included in the net worth, see Table 2 . below). You also estimate that a flood of customers will actually have a negative effect on your profits, so under that condition you reduce the total net worth (before subtracting off the building cost) by 25%. Table 3: # of Customers Wilminoton - Fonnomv IIn Wilmington - Economy Down Tackennville - Feonomv Un lacksonville - Economy Down New Rern - Economv Up New Bern - Economy Down Table 4: Probability of Traffic Volume