Question

You own a car dealership and are trying to decide how to configure the showroom floor. The floor has 2000 square feet of usable space. You have hired an analyst and asked her to estimate the NPV of putting a particular model on the floor and how much space each model​ requires:

Model	NPV	Space Requirement​ (sq. ft.)
MB345	$ 2 comma 500$2,500	200
MC237	$ 5 comma 000$5,000	250
MY456	$ 4 comma 000$4,000	240
MG231	$ 1 comma 500$1,500	150
MT347	$ 9 comma 000$9,000	450
MF302	$ 3 comma 600$3,600	200
MG201	$ 2 comma 000$2,000	150

In​ addition, the showroom also requires office space. The analyst has estimated that office space generates a NPV of

$ 14 per square foot. What models should be displayed on the floor and how many square feet should be devoted to office​ space?

Model	NPV	Space Requirement (sq. ft.)	PI
MB345	$2,500	200	$
MC237	$5,000	250	$
MY456	$4,000	240	$
MG231	$1,500	150	$
MT347	$9,000	450	$
MF302	$3,600	200	$
MG201	$2,000	150	$

Answer 1