After Research into Where to Place a New Restaurant,Burger Billies,a

question 99

Multiple Choice

After research into where to place a new restaurant,Burger Billies,a small fast-food chain,plans to open a new store near a small college.The anticipated customer base is students attending the college.They learn that a major fast-food chain will be opening a franchise within the college,which leads the owners of Burger Billies to revise their estimate of sales to one below the break-even point.Which of the following is most likely the best real option for Burger Billies to take with regard to the proposed restaurant site?

• A)option to delay
• B)option to expand
• C)option to abandon
• D)option to switch
• E)option to sell

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Definitions:

Barriers of Entry

Obstacles that make it difficult for new competitors to enter a market, including high startup costs, strict regulations, and established brand loyalty.

Cost Advantage

The benefit gained by a company when it produces goods or services at a lower cost compared to its competitors.

Typical Investor

An average or representative investor who reflects the general behaviors and preferences of the larger investing public.

High Risk Assets

Investments known to have a greater chance of loss or extreme fluctuations in value, often seeking higher rewards.