Satsuki has been serving high-end Japanese food in Bloomington, Illinois since 1990. Bloomington and Normal are twin-cities with the combined population of 90,000 where State Firm Insurance, the largest property and casualty insurance company in the US by revenues, is headquartered. Satsuki was very profitable from the beginning (annual net income of about 100,000 dollars). Upon its success in Bloomington, the owner wanted to open a similar restaurant in Champaign. She thought that in Champaign, like in Bloomington, there was a high-income population that would appreciate authentic Japanese cuisine.( Satsuki’s owner asked a prestigious consulting firm in Chicago to study the feasibility of the new restaurant. The consulting firm extensively analyzed demographic data and interviewed Champaign residents. The study concluded the prospect of the Champaign restaurant to be promising, and even predicted that the net income of the first year of the Champaign operation would reach $80,000. Encouraged by the study, the Satsuki’s owner went ahead with the plan. In order to start the operation smoothly, she hired the manager of Goldcreek, the restaurant in Champaign with a well-established history; the manager had a good reputation of raising high revenues at Goldcreek. Also, to have the Champaign restaurant provide quality food, the owner brought in a chef with excellent credentials from Japan. The Champaign restaurant opened in 1999. In the first year, despite the bright prospect, the Champaign restaurant lost $80,000. The second year’s loss was worse; the number rose to $120,000. In the third year, the loss was $200,000. Questions 1. Was Satsuki’s decision to expand into Champaign appropriate? Answer either “Appropriate” or “Not appropriate.” No other answer is allowed. 2. Given your answer to Question 1, what is (are) possible reason(s) for the losses of the Champaign restaurant?