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Your former college roomate calls you and asks to borrow $10,000 so that he can open a pizza restaurant in his hometown. In justifying this request he urges that there must be significant demand for pizza other fast food in his hometown because there are lots of such restaurants already there and three or four new ones are opening each month. He also argues that the demand for convenience food will continue to increase, and he points to the large number of firms that now sell frozen dinners in grocery stores. What are the risks involved in choosing to lend him money?

Operation Management, Management Studies

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