Question: Valuation of an acquisition

The Brothers Grimm have a chain of 450 book stores targeting literate adult nobility across Europe. (Called Noble books). They are considering acquiring Bairn’s books, a small Scottish children’s book company with 10 stores. The basic concept is to take Bairn’s books and make them available across the entire chain. In order to determine the value of Bairn’s, Nobles needs to determine how well these books will sell in their existing stores.

Part A) Annual sales at a Noble Books store is normally distributed with a mean of $562000 a year and a standard deviation of $75000 per year. In order to determine how much incremental revenue this acquisition might provide, a survey of store general managers needs to be conducted. How many general managers must be surveyed to determine if the addition of these books will increase revenue by $25,000 a year per store?

Price: $2.99

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Deliverable: Word Document