Question

a. In Problem 44, Mega-Mart is considering purchasing a parcel of land adjacent to the current site on which it plans to build its store. The cost of the parcel is $190,000, and it would enable Mega-Mart to increase the size of its store to 160,000 square feet. Discuss whether Mega Mart should purchase the land and increase the planned size of the store.
b. Suppose that the profit per square foot will decline in all departments by 20% if the store size increases to 160,000 square feet. (If the stock does not turn over as fast, increasing inventory costs will reduce profit.) How might this affect Mega-Mart's decision in (a)?



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  • CreatedJuly 17, 2014
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