1. **Problem Statement:** GreenBite Café must decide between two expansion options with a capital limit of 80000 KD: Option A (new branch) or Option B (delivery app).
2. **Decision-Making Tool:** We use the **Net Profit Analysis** to compare options, calculated as:
$$\text{Net Profit} = \text{Expected Annual Revenue} - \text{Annual Operating Cost}$$
This helps quantify profitability.
3. **Calculate Net Profit for Option A:**
$$\text{Net Profit}_A = 120000 - 60000 = 60000$$
4. **Calculate Net Profit for Option B:**
$$\text{Net Profit}_B = 110000 - 40000 = 70000$$
5. **Investment Check:** Both investments are within the 80000 KD limit:
- Option A: 70000 KD
- Option B: 50000 KD
6. **Other Factors:**
- Customer Base Growth: Option B (45%) > Option A (30%)
- Customer Retention: Option B is High, Option A Moderate
- Brand Visibility: Option A High, Option B Moderate
- Risks: Option A has high rent and fixed costs; Option B risks app failure and technical issues
7. **Recommendation:** Option B yields higher net profit (70000 KD vs 60000 KD), better customer growth and retention, and requires less initial investment, making it the preferable choice despite moderate brand visibility and technical risks.
**Final Answer:** Choose Option B: Launch the mobile ordering and delivery app for better profitability and growth potential.
Greenbite Expansion Ec9Bee
Step-by-step solutions with LaTeX - clean, fast, and student-friendly.