## Related questions with answers

Question

On the basis of your calculations, explain why the shoe-shop owner might find it difficult to choose between the two locations.

$\begin{array}{|c|c|c|} \hline \textbf { Year } & \textbf { Location A } & \textbf { Location B } \\ \hline 0 & (\$ 12000) & (\$ 12000) \\ \hline 1 & \$ 3000 & \$ 6000 \\ \hline 2 & \$ 4000 & \$ 5000 \\ \hline 3 & \$ 5000 & \$ 3000 \\ \hline 4 & \$ 6000 & \$ 2000 \\ \hline 5 & \$ 5000 & \$ 5000 \\ \hline \end{array}$

$\begin{array}{|l|c|c|c|c|} \hline \textbf { Year } & 1 & 2 & 3 & 4 \\ \hline \textbf { Discount factors @ 10\% } & 0.91 & 0.83 & 0.75 & 0.68 \\ \hline \end{array}$

Solution

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1 of 3In this question, we will **explain why the shoe-shop owner may have difficulty picking a location**.

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