Your Lease Calls for Payments of R500 at the End

question 48

Multiple Choice

Your lease calls for payments of R500 at the end of each month for the next 12 months.Now your landlord offers you a new 1-year lease which calls for zero rent for 3 months, then rental payments of R700 at the end of each month for the next 9 months.You keep your money in a bank time deposit that pays a simple annual rate of 5 percent.By what amount would your net worth change if you accept the new lease? (Hint: Your return per month is 5%/12 = 0.4166667%.)

• A) -R509.81
• B) -R253.62
• C) +R125.30
• D) +R253.62
• E) +R509.81

Explain the role of entrepreneurs as residual claimants in a business context.

Discuss the implications of a focus on profit for business efficiency and decision-making.

Describe non-routine decisions in entrepreneurship that involve significant financial risks.

Identify and understand the various sources of uninsurable risk.