Investment Decisions
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PART 1
A local pet store, PET STORE, which has concentrated in selling puppies, is considering adding a line of pet food. A contractor estimates that it will cost $10,000 to convert some storage space into a retail area for the food. PET STORE will purchase the specialty food for $15 and sell it for $30. Marketing research indicates that the store will sell 900 bags.
Should PET STORE add pet food to its products?
PART 2
Assume that PET STORE decided to add the pet food line. Two months after it began selling the food, its pet food sales declined dramatically because a competitor across the street started selling the identical food for $22 per bag.
Should PET STORE match the price offered by the competitor?
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PART 1
A local pet store, PET STORE, which has concentrated in selling puppies, is considering adding a line of pet food. A contractor estimates that it will cost $10,000 to convert some storage space into a retail area for the food. PET STORE will purchase the specialty food for $15 and sell it for $30. Marketing research indicates that the store will sell 900 bags.
Should PET STORE add pet food to its products?
Initial Set Up Cost = $10,000
Cost price for specialty ...
Education
- BE, Bangalore University, India
- MS, University of Wisconsin-Madison
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