Single choice · #585
Ms. Lin's snack shop business is steady. The agent said, "The same-sized storefront on the neighboring street costs 2,000 less per month in rent." She calculated that she could save 24,000 a year and signed a three-year lease that very day. After moving, most of her regular customers did not follow her, the new location had sparse foot traffic, and her monthly revenue dropped by nearly 6,000. She estimates it will take two years to rebuild her customer base. Against the seven-step checklist for important choices, which step did she mainly miss?
Show answer & explanation
Answer: C
- AShe missed Step 1: She only wrote "saving money," which was too vague. She should have first specified whether the savings would improve her life or expand the business before talking about moving.✗ Incorrect. Her goal of "reducing rent costs" was clear and measurable. Applying the "make goals specific" template mismatches the step and does not address the real flaw in her decision.
- BShe missed Step 2: She did not list her current measures. She should have first documented the specific practices that kept customers at the old location before deciding whether to move.✗ Incorrect. Documenting current practices helps analyze where customers come from, but her error occurred in the stage of comparing the costs of alternatives, not in failing to inventory existing measures.
- CShe missed Step 4: She only calculated the explicit rent difference, but did not account for the income loss from customer attrition and the long-term cost of a two-year rebuilding period, which together far exceed the 24,000 saved.✓ Correct. Step 4 requires calculating all costs, including opportunity costs and long-term consequences. The implicit losses—about 6,000 less per month for two years—are exactly what she should have factored in before signing.
- DShe missed Step 7: Signing a three-year lease is not a mistake, as long as she checks the monthly revenue and moves back promptly if it keeps declining.✗ Incorrect. This misunderstands feedback cycles as a universal fix: the three-year contract locks in exit costs, repeated moves are expensive, and costs missed upfront cannot be remedied by after-the-fact checks.
Explanation:The key to this question lies in Step 4, "Calculate all costs." Ms. Lin's calculation covered only the explicit rent difference (24,000 per year), but the real costs were the implicit ones: the drop in monthly revenue from lost regular customers (about 6,000) and the long-term damage over a two-year rebuilding period, which far exceeded the savings. This is a classic case of failing to include opportunity costs and long-term consequences. The option claiming she should have specified her goal more concretely and the one suggesting she should have inventoried current practices both mechanically apply other steps to the wrong stage. The option suggesting that monthly revenue checks could remedy the situation ignores that the three-year contract locked in exit costs, and after-the-fact feedback cannot substitute for upfront calculation.