Question

please show work and solve in excel

10. Your firm is preparing to open a new retail strip mall you have multiple businesses that would like lente space in it. Each business will pay a fixed me of rent each month plus a percentage of the gross sales generated each month. The cash flows from each of the businesses has approximately the same of risk. The business names are footage requirements, and monthly expected cash flows for each of the businesses that would like to lease space in your strip mallare provided below: Square Feet Expected Monthly Business Nam e Cash Flow Videos Now 2000 Gards Gym 1500 Pizza Warehouse 2.500 52.500 Super Clips 30 12 Flavor SMart 1.500 1.500 2000 250 20 10.000 WalVerde Drugs 6.000 147.000 Multiguar 1.000 22.250 Wireless your new strip mall will have 15,000 square feet of retail space available to be leased to which show you lewe

Answer 1

As per the information in the question, we understand that the total space available for rent is 15,000 square feet. However, the total space requirement by all the businesses exceeds the available space. So, in order to decide what all businesses to rent out the space to, we will need to find out rent paid per square feet demanded by each business. The business that pays higher rent should be given priority.

So, we will solve the problem in following steps:

Step 1: Calculate "the rent paid per square feet required" of each business.

Step 2: Sort the businesses as per "the rent paid per square feet" parameter in descending order.

Step 3: Now, add up the "space required" by the topmost businesses until total added "space required" parameter equals 15,000.

Step 4: Choose the businesses whose "space required" parameter was added up to equal 15,000 value.

Business Name	Square Feet Required	Expected Monthly Cash Flow	Expected Cash Flow per square feet required	Cumulative space
WalVerde Drugs	6,000	$1,47,000	$24.50	6,000
Multigular Wireless	1,000	$22,250	$22.25	6,000 + 1,000 = 7,000
Pizza Warehouse	2,500	$52,500	$21.00	7,000 + 2,500 = 9,500
30 1/2 Flavors	1,500	$28,500	$19.00	9,500 + 1,500 = 11,000
Videos Now	4,000	$70,000	$17.50	11,000 + 4,000 = 15,000
Super Clips	1,500	$25,500	$17.00
Gords Gym	3,500	$52,500	$15.00
S-Mart	12,000	$1,80,000	$15.00

So, we see that following businesses are the ones that can be chosen for lease offer:

1. WalVerde Drugs
2. Multigular Wireless
3. Pizza Warehouse
4. 30 1/2 Flavors
5. Videos Now

Reason: These are the businesses that pay comparatively higher rent per square feet as compared to the other businesses.