What are the owners projected payments

Assignment Help Business Management
Reference no: EM132932712

Question

A retail tenant is paying a base rent of $120,000.00 ($10,000.00 per month). In addition the tenant would pay 7 percent of gross store sales in excess of $143,000 per month as percentage rent. If the store produces $170,000.00 in gross sales per month, what is the percentage rent in that month? What is the total rent due?

Mr Smith has presented two lease proposals to the owner of an office building. The first alternative has a five year term and a contract rental rate of $170.00 per square metre in the first year of the lease. The rental rate then increases to 3 percent per year over the remaining term of the lease. Therefore the rental rate after first year would be $175.10 per square metre.

The second alternative is also a five year lease with an initial contract rental rate of $170.00 per square metre. However the rental rate on this lease is indexed to inflation with adjustment made at the beginning of each year, based on the actual rate of inflation in the previous year. It is believed that the inflation rate will increase at 3 percent per year over the five year lease term.

1) What are the owners's projected payments over the five year term for the two alternatives?

2) Which option is likely to be accepted by the owner and why?

Reference no: EM132932712

Questions Cloud

Why do organizations adopt the transformational leadership : Why do organizations adopt the transformational leadership model and How do organizations use transformational leadership to manage change and achieve
What was the end of year balance in investment in little : After recording the equity method entries for the year, what was the end of year balance in the "Investment in Little" reported on Big's ledger
Handling of incident of violence consistent : Do an Internet search regarding the player violence that occurred on March 8, 2004, in an NHL game between Steve Moore of the Colorado Avalanche and Vancouver C
What is the importance of an internship program : What is the importance of an Internship Program in your career and How can you improve your personality through the internship program
What are the owners projected payments : A retail tenant is paying a base rent of $120,000.00 ($10,000.00 per month). In addition the tenant would pay 7 percent of gross store sales in excess of $143,0
Calculate jim rate of return : In June, he closes out his position by selling a T-bond futures contract with a June settlement at 112.00. Calculate Jim's rate of return
Why might a behavioral interview be used : Why might an applicant pool be screened for the use of social media? List the three requirements for a fair and legitimate job-applicant test.
Why is the paleness in aplastic shortcoming : What do we call the process of identifying suitable candidates and encouraging them to apply for job openings in the organization in HR management
Describe an organization in terms of the dynamics : How can we describe an organization in terms of the dynamics?

Reviews

Write a Review

Business Management Questions & Answers

  How has the covid-19 pandemic changed business

How has the COVID-19 pandemic changed and effected the way day-to-day business operations are conducted? What are some of the lesson's learned that can applied

  Who are project stakeholders

Who are 'project stakeholders?' Why is it important to consult with stakeholders when preparing a project plan. Provide at least four areas for consultation.

  How will rfid capability make the production grow

With the evolution of RFID instead of UPC, how will this capability make the production grow and improve inventory and security? Give two examples of RFID applications in business.

  Opposing objectives on the project

Discuss possible ramifications of these opposing objectives on the project. What would you do if you were the manager?

  Washers and dryers to apartment landlords for a contracted

Sudson Washer and Dryer Service is in the business of leasing used washers and dryers to apartment landlords for a contracted lease term. The coin-operated machines are used by apartment tenants. Letisha, 25, a human resource clerk, owns a five-un..

  Manager is leader by default backed

A manager is a leader by default backed up by Fayol's 5 competencies of: Discuss critically.

  Video related to hr and hiring

You are to locate any video related to HR and Hiring and provide a summary for the video chosen. The summary is to be 250 words (or a little more).

  Discuss the importance of art to you personally

Comment on the importance of art in everyday life. Discuss the importance of art to you personally.

  The decision-making dm process consists of a managers

the decision-making dm process consists of a managers ability to critically assess a problem or issue and develop a

  Research on the topic of resisting change

Do some brief research on the topic of resisting change. What determines whether or not people resist change?

  Describe leader power and aspects of effective followership

Describe leader power, follower motivation, and the aspects of effective followership. Provide an overview of influence and the major process and content motivational theories.

  How could the organization have prevented job withdrawal

How could the organization have prevented job withdrawal? Overall, were you or the individual satisfied or dissatisfied with the job or volunteer work?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd