The Porter Beverage Factory owns a building for its operations. Porter uses only

Question

The Porter Beverage Factory owns a building for its operations. Porter uses only half of the building and is considering two options for the unused space. The Popcorn Store would like to purchase the half of the building that is not being used for $390,000. A 9% commission would have to be paid at the time of purchase. Salty Snacks would like to lease the half of the building for the next 5 years at $103,000 each year. Stewart would have to continue paying $38,600 of property taxes each year and $7,400 of yearly insurance on the property, according to the proposed lease agreement. Determine the differential income or loss from the lease alternative. Enter a loss as a negative number. $

Explanation / Answer

Difference loss from the lease alternative would be - $ 69,900

Alternative I ( Sale) Alternative II ( Lease) $ $ Sale proceeds net of commission 354,900 Total lease rentals 515,000 Property taxes and insurance (230,000) Net proceeds 354,900 285,000

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.