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Question - A company's rent increases are to be based on CPI increases as published in the BLS data tables. The company's current rent is $15.00 per square foot per year on a 3,000 square foot space. Rent will increase next month (April), based on inflation measured over the past year from December 2018 to December 2019. Rent cannot decrease below the current level. The applicable index in December 2018 was 234.8 and in December 2019 the index was 242.2. What will the new monthly rent be effective October 1, 2020 based on these figures? What would the monthly rental be on April 1 if the December 2019 index was 232.2?
Financial Statement Analysis and Preparation
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