1. Contrast the location of a food distributor and a supermarket.

(The distributor sends truckloads of

food, meat, produce, etc., to the supermarket.) Show the relevant considerations (factors) they
share; show those where they differ.

2. Explain how net present value is an appropriate tool for comparing investments.
Answer: Net present value (NPV) is the difference between the present value of cash inflows and
the present value of cash outflows over a period of time and also used to calculate the current
total value of a future stream of payments. It’s one of the parts of capital budgeting that calculates
the investment acceptability rate by determining if the project is either positive or
negative(acceptable or unacceptable). It is also a tool that compare certain investment project on
which tries to determine whose project would be better to prioritize. Companies that are about to
expand their business needs to have a financial basis on choosing which are the best among the
options and the calculation of net present value is appropriate tool to use.