Which firm or firms should expand into rural new york


Wayne's of New York specializes in clothing for female executives living and working in the financial district of New York City. Allen's of PA. specializes in clothing for women who live and work in the rural areas of Western Pennsylvania. Both firms are currently considering expanding their clothing line to encompass working women in the rural upstate region of New York state. Wayne's currently has a cost of capital of 11 percent while Allen's cost of capital is 9 percent. The expansion project has a projected net present value of $36,900 at a 9 percent discount rate and a net present value of -$13,200 at an 11 percent discount rate. Which firm or firms should expand into rural New York state?

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