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Isabella Is Considering Three Mutually Exclusive Options for the Additional

question 35

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Isabella is considering three mutually exclusive options for the additional space she just added to her specialty women's store. The cost of the expansion was $127,000. She can use this additional space to add a fabric and quilting section, add an exclusive gifts department, or expand into imported decorator items for the home. She estimates the present value of these options at $114,000 for fabric and quilting, $163,000 for exclusive gifts, and $138,000 for decorator items. Which option(s) , if any, should Isabella accept?


Definitions:

Employees

Individuals who work for a company or organization and are paid for their labor and expertise.

Horizontal Merger

A merger between two or more companies operating in the same industry at the same stage of production.

Vertical Merger

A business consolidation that occurs between companies that operate within the same supply chain, typically involving a manufacturer merging with a supplier or a distributor.

Conglomerate Company

A conglomerate company is a large corporation composed of diverse companies operating in various industries or sectors, typically under one corporate group.

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