Use the Information for the Question(s)below

question 82

Essay

Use the information for the question(s)below.
Your firm is preparing to open a new retail strip mall and you have multiple businesses that would like to lease space in it.Each business will pay a fixed amount of rent each month plus a percentage of the gross sales generated each month.The cash flows from each of the businesses have approximately the same amount of risk.The business names,square footage requirements,and monthly expected cash flows for each of the businesses that would like to lease space in your strip mall are provided below:
-If your new strip mall will have 15,000 square feet of retail space available to be leased,to which businesses should you lease and why?

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Definitions:

Accrued Interest

Interest that has been incurred but not yet paid or received, often relevant in bond investments and loans.

Asked Price

The minimum price a seller is willing to accept for an asset or security.

Coupon Bond

A type of bond that provides periodic interest payments to its holder, based on the fixed interest rate (coupon rate) of the bond.

Current Yield

The interest or dividends received from a security divided by the current market value of the security, often used to describe bonds.