question archive A pizza chain is planning to open a new store

A pizza chain is planning to open a new store

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A pizza chain is planning to open a new store. The management estimates that the new store will generate sales of $500,000 per year. A previous store, 5 miles away, currently has sales of $750,000 but the management expects 10% of the old store's customers to use the new location instead. Assuming these customers also account for 10% of the old store's sales, what will be the incremental sales generated by the new store?

 

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