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A Researcher Does a Study for a New Super Target

question 4

Multiple Choice

A researcher does a study for a new Super Target store.The client wants to know which of five cities should be selected,and a specific location within the city of choice.The researcher investigates several sources of secondary data and finds the following:
City Population Growth Growth in Retail Sales
Metropolis 5% 14%
Smallville 7% 13%
Gotham City 4% 8%
The Big Apple 2% 4%
The Big Easy 10% 17%
The researcher,based on the information at hand,recommends The Big Easy,and asks to be paid.Why should the client not pay the researcher?


Definitions:

Maintenance Agreement

A contract between a vendor and a customer stipulating regular maintenance services and support over a specified period.

Implicit Lease Rate

An inferred interest rate in a lease agreement, calculated from the lease payments, the fair value of the leased asset, and the residual value.

Present Value Interest Factors

A factor used to calculate the present value of a future amount when the interest rate and period are known.

Guaranteed Residual Value

Guaranteed Residual Value is an assurance that the value of an asset at the end of its lease term will be at least a specified amount.

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