Reference no: EM132471564

Carver's Auto Custom has two potential retail spaces to choose from.

1. Warehouse Space A: Includes 8000 sq. ft. of showroom and workshop space. It rents for .85 cents per sq. ft. and an additional .25 cents per sq. ft. for operations expenses. One half of this warehouse space will be used to stock paint cans and rims.
2. Warehouse Space B: Includes 6000 sq. ft. of only workshop space. It rents for .85 cents per sq. ft. and an additional .25 cents per sq. ft. for operations expenses. The leasing agreement must include a 2-year contract for a monthly web administration fee for an online virtual showroom. The introductory rate for managing the virtual showroom is $99 per month for the first year followed by $199 per month thereafter. Three-fourths of this warehouse space will be used to stock paint cans and rims.

Question 1: Calculate the total cost for selecting Retail Space A for a 1-year lease.

Carver's Auto Custom has two potential retail spaces to choose from.

1. Warehouse Space A: Includes 8000 sq. ft. of showroom and workshop space. It rents for .85 cents per sq. ft. and an additional .25 cents per sq. ft. for operations expenses. One half of this warehouse space will be used to stock paint cans and rims.
2. Warehouse Space B: Includes 6000 sq. ft. of only workshop space. It rents for .85 cents per sq. ft. and an additional .25 cents per sq. ft. for operations expenses. The leasing agreement must include a 2-year contract for a monthly web administration fee for an online virtual showroom. The introductory rate for managing the virtual showroom is $99 per month for the first year followed by $199 per month thereafter. Three-fourths of this warehouse space will be used to stock paint cans and rims.

Question 2: Calculate the total cost for selecting Retail Space A for a 2-year lease.

Carver's Auto Custom has two potential retail spaces to choose from.

1. Warehouse Space A: Includes 8000 sq. ft. of showroom and workshop space. It rents for .85 cents per sq. ft. and an additional .25 cents per sq. ft. for operations expenses. One half of this warehouse space will be used to stock paint cans and rims.
2. Warehouse Space B: Includes 6000 sq. ft. of only workshop space. It rents for .85 cents per sq. ft. and an additional .25 cents per sq. ft. for operations expenses. The leasing agreement must include a 2-year contract for a monthly web administration fee for an online virtual showroom. The introductory rate for managing the virtual showroom is $99 per month for the first year followed by $199 per month thereafter. Three-fourths of this warehouse space will be used to stock paint cans and rims.

Question 3: Calculate the total cost for selecting Retail Space B for a 1-year lease.

Carver's Auto Custom has two potential retail spaces to choose from.

1. Warehouse Space A: Includes 8000 sq. ft. of showroom and workshop space. It rents for .85 cents per sq. ft. and an additional .25 cents per sq. ft. for operations expenses. One half of this warehouse space will be used to stock paint cans and rims.
2. Warehouse Space B: Includes 6000 sq. ft. of only workshop space. It rents for .85 cents per sq. ft. and an additional .25 cents per sq. ft. for operations expenses. The leasing agreement must include a 2-year contract for a monthly web administration fee for an online virtual showroom. The introductory rate for managing the virtual showroom is $99 per month for the first year followed by $199 per month thereafter. Three-fourths of this warehouse space will be used to stock paint cans and rims.

Question 4: Calculate the total cost for selecting Retail Space B for a 2-year lease.