Use the Information in the Following Table to Answer the Subsequent

question 26

Multiple Choice

Use the information in the following table to answer the subsequent questions:
$\begin{array}{|l|c|c|}\hline \underline{ Industry } & \frac{\text { Local }}{\underline{ Employment }} & \frac{\text { National }}{\underline{ Employment }} \\\\\hline \text { State \& Federal Government } & 50,000 & 10,000,000 \\\hline \text { Legal Services } & 13,000 & 2,000,000 \\\hline \begin{array}{l}\text { Computer Manufacturing \& } \\\text { Repair }\end{array} & 4,000 & 2,500,000 \\\hline \text { Total All Employment } & 200,000& 120,000,000 \\\hline\end{array}$
-Suppose the most productive use of a particular site is as a manufacturing plant that will generate revenues of $12,000,000 per year with raw material costs and operating expenses other than net rent) of $7,000,000 per year, and construction costs for the plant and equipment) that can be paid for with a perpetual loan with interest of $3,000,000 per year. According to the residual theory, how much is this site worth in terms of annual land rent?

• A) $20,000,000.
• B) $12,000,000.
• C) $10,000,000.
• D) $2,000,000.

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Definitions:

Span Of Control

The number of subordinates directly reporting to a manager.

Subordinates

Employees or team members who are under the direction and control of a senior manager or supervisor in an organizational hierarchy.

Manager

A person responsible for controlling or administering an organization or group of staff, focusing on achieving goals through directing efforts and resources.

Chain Of Command

The formal line of authority, communication, and responsibility within an organization.