Reference no: EM132580964

The ABC Development Company was selected to manage a major new mall. This mall would be surrounded by a large, medium-income residential neighborhood composed of private homes and townhouses ranging from $350,000 to $1,000,000. In order to select the appropriate store type that would be successful in this area, management researched the profitability of different types of stores.

The following information was collected:

Year                       Department Stores

Profits this year: $1,580,722

Profits last year: $1,470,655

Profits to sale this year 3.5%

profits to sale last year: 3.3%

Mass                        Merchandisers

Profits this year$2,033,300

Profits last year$1,896,700

Profits to sale this year 2.8%

Profits to sale last year 2.8%

Specialty Stores

Profits this year $568,774

Profits last year $555,579

Profits to sale this year 4.4%

Profits to sale last year 4.4%

Discounters

Profits this year $432,774

Profits last year $335,336

Profits to sale this year 3.4%

Profits to sale last year 3.4%

Off-price Stores

Profits this year $32,073

Profits last year $24,143

Profits to the sale this year 5.4%

Profits to sale last year 5.4%

Miscellaneous

Profit this year $461,537

Profit last year $478,326

Profits to sale this year 2.3%

Profits to sale last year 2.3%

Total

Profit this year $5,109,180

Profit last year $4,760,739

Profit to sale this year 3.0%

Profit to sale last year 3.0%

Question a. Calculate the dollar profit percentage change from this year to last year.

Question b. Calculate the net sales for last year and this year.

Question c. Which store type had the most significant profit change?

Question d. What store type would you recommend? Why?

Question e. Discuss the possible causes of profit percentage change from last year to this year.