Essay
Fran is considering permanently closing down her beauty salon. A consultant advises her that if she stays open for business, she will have operating revenues of $300,000 and operating costs of $280,000. In addition, Fran has paid $40,000 for fixtures that can be resold for $15,000 after she closes the beauty salon.
a. What is the value of Fran's beauty salon if it remains open?
b. What is the value of Fran's beauty salon if she closes it?
c. Explain whether Fran should close down the beauty salon.
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