Question: The owner of a local convenience store is considering selling his store and retiring. He currently earns $85,000 per year in profits from running the convenience store. You are looking to put your MBA degree to work by buying (and then running) a business. After examining the convenience store, you have determined that there are a number of costless improvements you could make that would increase profits to $100,000. How much surplus would be created by transferring ownership of the convenience store from the current owner to you? What sales price would you offer the convenience store owner if you hoped to keep 2/3 of the generated surplus?
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