A "Pop-Up" Store Wants to Use Vacated Space at a Shopping

question 15

Multiple Choice

A "pop-up" store wants to use vacated space at a shopping mall to sell seasonal merchandise during the months of October, November and December. The rent is $10,000 per month, but the mall's owners are requiring a payment of $100,000 on September 1. If the space is vacated in good condition at the end of December, the owners will return $70,000 to the lessees. How should the $100,000 be financed?

• A) Space is a permanent asset and should be financed with equity or long-term debt.
• B) Because the lessee may rent the same or similar space in future years, they should use long-term debt or equity.
• C) The space is a temporary asset and should be financed with short-term loans.
• D) The space is a temporary asset and should be financed with trade credit.

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Definitions:

Maintenance Rehearsal

A cognitive process involving the repetition of information to keep it in short-term memory or to encode it into long-term memory.

Long-Term Memory

The phase of the memory process responsible for the storage of information over extended periods, potentially lasting from days to a lifetime.

Long-Term Memory

A type of memory capable of storing information for extended periods, often throughout a person's life.

Short-Term Memory

Short-term memory is the capacity for holding a small amount of information in an active, readily available state for a short period of time.