Jewel Osco is considering a small expansion of its flower & garden section at its northwest Chicago store. It plans to spend $6,250 to move its nursery out of the parking lot and into a small Florida room, Jewel managers believe it will improve profits to the store. Managers consider this a five year project and calculated expected cash flows.
The manager is also considering this same expansion in its south side store; however, he cannot afford to expand both stores. He must choose one.
Work through the Attached quiz to learn how interest rates impact the decision criteria for this project. At the end, make a recommendation as to which store (if any) should be renovated.