BUSINESS COLLEGE

A small business has leased office space for $10,000 per year. It cannot get out of that contract. It could sublease the space to another business for $14,000 per year.Assuming no other costs, how high would revenues have to be to justify the small business continuing to use the space for itself?a. $4,000b. $10,000c. $14,000d. $24,000

Answers

Answer 1
Answer:

Answer:

The correct answer is D: Revenues= $24000

Explanation:

Giving the following information:

A small business has leased office space for $10,000 per year.

It could sublease the space to another business for $14,000 per year.

How high would revenues have to be to justify the small business continuing to use the space for itself?

The small business has to generate enough income to pay for the $10000 lease and make a profit of $14000.

Revenues= 10000+140000= $24000


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Answers

Answer:

Option D is correct

Explanation:

The reason is that the company desires to emphasize control over the economic down turn. Most companies collapse in recession due financial distress. And salary of permanent employees is fixed cost which the company has to pay whatever the situation is. Using freelancer's facilities and temporary workers helps in controlling the cost of the product and ensures the survival of the company.

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