1. Group 2: e-Commerce vs. Storefront Kevin Sell Minh Si Kimsenjaya Tjendana Xibin Wu

2. Business Venture Business Type: Book Seller Market focus: College students Scenarios: 1. Storefront 2. e-Commerce

3. Key Advantage Bookstore: –Higher discount percentage per book from the retail book seller e-Commerce: –Low overhead

4. Criterion to Determine the Best Alternative Neither Input Nor Output is Fixed Therefore Maximize Profit

5. Assumptions Minimum Attractive Rate of Return: 15% Annual Book Sales: 20,000 books Average Selling Price: Storefront - $90 e-Commerce - $85 Analysis Period: 10 years Discount: 10% for e-Commerce 15% for storefront No equipment purchase, lease instead

6. Annual Cash Flow Diagram e-Commerce Storefront

7. Annual Worth Analysis Bring all annual ATCF to present P=F(P/F,i,n) Find Annual Worth from P A=P(A/P,i,n) e-CommerceStorefront AW$28551$84767

8. Sensitivity Analysis: MARR Range: 10% - 30%

9. Sensitivity Analysis: Analysis Period Range: 4 - 20 years in 2 year increments

10. Sensitivity Analysis: Discount Percentage Range: 5% - 20%

11. Sensitivity Analysis: Sales Volume Range: 10,000 - 30,000 books

12. Sensitivity Analysis: Selling Price Range: $82 - $100 per book

13. Conclusion The Winning Scenario Based on Maximizing Profit is “Storefront”

14. Reference Newnan, Donald G.. Essentials of Engineering Economic Analysis. Oxford University Press, NY. 2002 Elena’s Hair Salon. San Diego, CA. Baker & Taylor Retail Services for Book Sellers Amazon.com Bronco Bookstore SBC Yellow Page SoCal Yellow Page In & Out Warehousing INC Salary Wizard of Salary.com Dr. Phillips R. Rosenkrantz