A Small Department Store in a Mall Has the Opportunity

question 84

Multiple Choice

A small department store in a mall has the opportunity to rent an additional 20,000 square feet of space for five years.It can divide up this space between the above new departments.Each department will require a different amount of space,and each department is expected to make a yearly profit as shown,for each of the next five years.The discount rate is 10%.Based on this information,what departments should be added?

• A) Pet, Fabrics, Hardware, and Shoe Repair
• B) Fabrics, Luggage, Hardware, Watches, and Shoe Repair
• C) Pets, Fabrics, Book, and Luggage
• D) Pet, Fabrics, Luggage, Hardware, and Shoe Repair
• E) Fabrics, Book, Luggage and Shoe Repair

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Definitions:

Family Resemblance Test

A legal test applied to determine whether a new financial instrument should be classified as a security under U.S. law.

Reves v. Ernst & Young

A significant court case that established a test for determining whether a transaction qualifies as a security under the securities laws.

Promissory Notes

Written promises to pay a specified sum of money to a certain entity or person at a specified time or on demand.

Howey Test

A test derived from SEC v. W.J. Howey Co. to determine if a transaction qualifies as an "investment contract" and thus is considered a security subject to certain regulatory requirements.