In July, Bruce Leases a Building to Vanessa for a Period

question 102

Multiple Choice

In July, Bruce leases a building to Vanessa for a period of twenty years at a monthly rental of $1,500. As part of the lease agreement, Vanessa pays a $3,000 security deposit. In addition, the lease agreement states that any improvements that Vanessa made to the building become Bruce's property. Prior to moving in on July 1, Vanessa makes improvements to the building at a cost of $13,000. How much gross income does Bruce have from the lease arrangement in the first year of the lease?

• A)$9,000
• B)$12,000
• C)$22,000
• D)$25,000
• E)None of the above.

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Definitions:

OPEC

The Organization of the Petroleum Exporting Countries (OPEC) is an international cartel that aims to manage the supply of oil in an effort to set the price of oil on the world market.

Tax Burden

The overall economic weight of taxation on an individual, corporation, or other entity, often measured as a percentage of income or revenue.

Inelastic

A characteristic of demand whereby a change in price leads to a lesser change in the quantity demanded, indicating low sensitivity to price changes.

Price Ceilings

Government-imposed limits on how high a price can be charged for a product, service, or commodity.