Question

Case 12-2 County Line Markets: Store Remodel and New Store Investment (by Ron Rizzuto and Lou D’Antonio, Journal of Financial Education, Vol. 35 (Spring 2009)

1. Determine the investment options that County Line Markets (CLM) should consider for the Park Hills Area.

Answer 1

A pressing issue facing boundary Markets (CLM) is that the call to upgrade, expand or replace ten stores. These ten CLM stores are placed in areas wherever the demographics, population, and competitive landscape have modified dramatically since the stores were last reworked. The key capital in gown trade-off call facing CLM is whether or not to: 1) transform or expand its existing stores currently; 2) replace its existing stores now with new, larger superstores; or, 3) take no action. Investment analysis of 2 stores at the Park Hill Acres and Webster Street locations. though the precise circumstances of every location are totally different, the analytical and judgmental problems facing CLM's management are typical of these gift at every location. during this case, students should initial take into account the strategic aspects of this capital budgeting call by determinative CLM's investment choices for these 2 specific locations. Ought to take into account the relevancy and impact of the 'sales erosion' between the stores given the various choices for store size also as their competitive landscape. additionally to the standard discounted income analysis of a capital budgeting investment.