LA Week 5 Lease or Purchase Space
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LA Week 5 Lease or Purchase Space – Landlord/Tenant Notes 2 Recommendation for PI to lease or purchase space for their new facility.
You:
recommend whether a company should lease space or purchase space. One space is next door to their current business facility and is bigger than their current space. The other space is much larger than the current location and would accommodate growth for more than ten years and located across town. If the business purchase new space it would require a mortgage. The expense would be greater monthly expense for a new leased space. ChatGPT
Based on the provided information, here are the recommendations for whether the company should lease or purchase space:
Space Next Door (Larger Than Current):
Lease Recommendation:
Since the space next door is larger than the current facility and conveniently located, leasing could be a viable option. Leasing offers flexibility without tying up
significant capital and allows the company to quickly expand its operations. Additionally, if the monthly expense for leasing is lower than the expense of obtaining a mortgage for purchasing, it could be financially advantageous in the short term.
Space Across Town (Much Larger):
Purchase Recommendation:
Given that the space across town is much larger and can accommodate the company's growth for more than ten years, purchasing might be the preferable choice in this scenario. While it would require taking out a mortgage, owning the property offers long-term stability and potential appreciation in property value. If the company can afford the greater monthly expense associated with the mortgage compared to leasing, purchasing could provide significant benefits in the long run.
In summary, leasing the larger space next door could be a practical solution for immediate expansion needs with lower monthly expenses. However, if the company aims for long-term growth and stability, purchasing the much larger space across town, despite the higher monthly expense, could offer greater benefits in the future, provided the company can manage the financial obligations associated with a mortgage.
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Read the problem carefully and use UPS Check to solve the problem. Show your mathematical thinking and record your final solution.
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□ [myUT
1
ovide your answer below:
N
Module 2.5: Understanding
ALT
Courses
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Calculate the monthly payment and interest cost for a mortgage
Question
A mutual fund manager wishes to purchase a property that's been valued at $1.5 m. She has $200,000 in cash to use as a
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C
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B
Module 2.5: Understanding & in
N
FEEDBACK
3
V-
Content
ALT
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+
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FN
88
11
SUB
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QUESTION
FINANCING AND SETTLEMENT » FINANCING LEGISLATION
32 c
When a buyer goes in to apply for a loan on a new first mortgage, what must the lender give to the buyer?
Glossary Terms
Mortgage,
ANSWERS
EXPLANATION
A > The broker's commission amount
B > An estimate of the buyer's closing costs
C> An estimate of the seller's closing costs
D> A three day right of rescission document on the buyer's loan
CONN ESTW ITL CI
SCEPTR
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OB. $1,125,000
OC. $6,375,000
OD. $750,300
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