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vodka [1.7K]
3 years ago
15

A small business has leased office space for $10,000 per year. It cannot get out of that contract. It could sublease the space t

o another business for $14,000 per year.Assuming no other costs, how high would revenues have to be to justify the small business continuing to use the space for itself?a. $4,000b. $10,000c. $14,000d. $24,000
Business
1 answer:
ElenaW [278]3 years ago
6 0

Answer:

The correct answer is D: Revenues= $24000

Explanation:

Giving the following information:

A small business has leased office space for $10,000 per year.

It could sublease the space to another business for $14,000 per year.

How high would revenues have to be to justify the small business continuing to use the space for itself?

The small business has to generate enough income to pay for the $10000 lease and make a profit of $14000.

Revenues= 10000+140000= $24000

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Answer:

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Explanation:

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3 years ago
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Answer:

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I hope this helps someone!!

7 0
3 years ago
Great Lakes Steel Supply is losing significant market share and thus its managers have decided to decrease the firm's annual div
Colt1911 [192]

Answer:

There's an error in the numbers for this question; I found the correct one and pasted it below;

"Great Lakes Steel Supply is losing significant market share and thus its managers have decided to decrease the firm's annual dividend. The last annual dividend was $1.30 per share but all future dividends will be decreased by 2.75 percent annually. What is a share of this stock worth today at a required return of 15.5 percent? "

Explanation:

Use dividend discount model (DDM) to calculate the stock price

P0 = \frac{D0(1+g)}{r-g}

whereby,

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r = required return = 155% or 1.55 as a decimal

Next, plug in the numbers to the DDM formula above;

P0 = \frac{1.30(1-0.0275)}{0.155 + 0.0275} \\ \\ = \frac{1.2643}{0.1825} \\ \\ =6.9277

Therefore this stock is worth $6.93

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Why are small businesses an important part of the American economy
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