1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Nina [5.8K]
3 years ago
14

A store has 5 years remaining on its lease in a mall. Rent is $2,000 per month, 60 payments remain, and the next payment is due

in 1 month. The mall's owner plans to sell the property in a year and wants rent at that time to be high so that the property will appear more valuable. Therefore, the store has been offered a "great deal" (owner's words) on a new 5-year lease. The new lease calls for no rent for 9 months, then payments of $2,750 per month for the next 51 months. The lease cannot be broken, and the store's WACC is 12% (or 1% per month).
Required:
a. Should the new lease be accepted ?(Hint: Make sure you use 1% per month)

b. If the store owner decided to bargain with the mall's owner over the new lease payment, what new lease payment would make the store owner indifferent between the new and old lease ? ( Hint: Find FV of the old lease's original cost at t=9 months; then treat this as the PV of a 51- period annuity whose payments represent the rent during months 10 to 60.)

c. The store owner is not sure of the 12% WACC- it could be higher or lower. At what nominal WACC would the store owner be indifferent between the two lease ?
Business
2 answers:
Tcecarenko [31]3 years ago
5 0

Answer:

Explanation:

Uhh

Tpy6a [65]3 years ago
3 0

Answer:

This mad absolutly no sense

Explanation:

clarify and i can help more

You might be interested in
Under market organization, individuals can communicate their preferences to other decision makers directly, through communicatio
salantis [7]

Answer:

B) False

Explanation:

The way the transaction takes place on the market is the Market Organization. Over time it's determined by a combination of factors: chance events (e.g., technical innovations, locations), financial and physical limitations (transaction costs, intelligence cost, manufacturing costs)etc.

8 0
3 years ago
Many economists oppose a constitutional amendment that would require a balanced budget for the federal government because it wou
masha68 [24]
False is the correct answer
8 0
2 years ago
Career skills refer to the complicated tasks performed on the job <br><br> T or F
aksik [14]
The answer is  fales hope i helped
3 0
3 years ago
Read 2 more answers
What is your reaction to Harriet's suggestion of using the cost of debt only?
Ahat [919]

Answer:

No, it is a bad idea to use only the cost of debt

Explanation:

Only using the cost of debt, is not a good idea because too much amount of borrowing could lose the confidence of the investors and it could lead to the uncertainty in the future cash flows.

Suppliers might be worried regarding the financial situation and lead to the supply disruption. Though, the debt might save the tax expenses, which could lead to the negative cash flow.

When the company does not have adequate amount of cash at hand, it could cause many disruptions of financial. WACC (Weighted Average Cost of Capital) rates need to be used as the capital costs as it weigh the used capital cost and the used debt.

8 0
3 years ago
You are talking with the president of your company about a possible merger. After she finishes speaking, you respond, "If I unde
topjm [15]

Answer:

The correct answer is -Descriptive.

Explanation:

The descriptive comment, as the name implies, makes a description of some element. You can focus on a person, an animal, a landscape, an object or a situation, to name a few possibilities.

Feature enumeration is the main feature of descriptive comment. While a narrative comment relates events and an argumentative text provides reasons, a descriptive comment focuses on the mention of particularities for the construction of a representation of the element in question.

6 0
3 years ago
Other questions:
  • Andy assumed the character of jude in order to confront the
    6·1 answer
  • You left work on Thursday evening and forgot to turn in a report that was due that day to your manager. You decide you need to c
    11·1 answer
  • WHY should families use active listening strategies?
    10·2 answers
  • Dell Computers invests excess cash balances overnight in a London bank to earn a higher interest rate than it could earn in a Ne
    13·2 answers
  • Choose the preferred sentence from each pair and justify your choice.
    10·1 answer
  • One of the most important features of the franchise contract is the provision related to
    9·1 answer
  • In bramble, Inc., the Assembly Department started 30,000 units and completed 35,000 units. If beginning work in process was 15,0
    15·1 answer
  • All of the following are ways the WBS helps in managing projects EXCEPT Select one:
    14·1 answer
  • 9. The cost of producing one more unit of a good is known as a(n) (1) Fixed cost. (2) Variable cost. (3) Operating cost. (4) Mar
    8·1 answer
  • What are resources in business studies
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!