Reference no: EM133235854

Ohio Shoe Stores is planning to sell its Brunswick, Warren, and North Ridgeville stores. The firm expects to sell each of the three stores for the same, positive cash flow of $E. The firm expects to sell its Brunswick store inZ years, its Warren store in Z years, and its North Ridgeville store in X years. The cost of capital for the Brunswick and Warren stores is J percent and the cost of capital for the North Ridgeville store is M percent. We knowthat Z> X> 0 and J> M > O. The cash flows from the sales are the only cash flows associated with the various stores. Based on the information in the preceding paragraph, which one of the following assertions is true?

- The Warren store is the most valuable of the 3 stores

- Two of the three stores have equal value and those two stores are more valuable than the third store or all three stores have the same value

- The Brunswick store is the most valuable of the 3 stores O The North Ridgeville store is the most valuable of the 3 stores

- Cannot be determined based on the information given.