The Owner of a Music Store Is Considering Remodelling the Store

question 43

Essay

The owner of a music store is considering remodelling the store in order to carry a larger inventory. The cost of remodelling and additional inventory is $43 200. The expected increase in net profit is $7000 per year for the next 3 years and $10 000 each year for the following 7 years. After ten years, the owner plans to retire and sell the business. She expects to recover the additional $40 000 invested in inventory but not the $43 200 invested in remodeling. Compute the rate of return.

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Definitions:

Variables

Elements or conditions that can change or vary within an experiment or study, potentially influencing the outcome.

Normal Curve

A symmetrical bell-shaped curve that represents the distribution of many physical and psychological attributes.

Distribution

In statistics, the way in which values of a variable or a set of data are spread or distributed across a range of values.

Physical Heights

The measurement of how tall or high something or someone is.