Question
A pop-up store wants to use vacated space at Aeon Mall to sell seasonal merchandise during the months of October, November and December. The rent
A "pop-up" store wants to use vacated space at Aeon 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 financed?
a. The space is a permanent asset and should be financed with equity or long-term debt.
b. The space is a temporary asset and should be financed with short-term loans.
c. The space is a temporary asset and should be financed with trade credit.
d. Because the lessee may rent the same or similar space in future years, they should use long-term debt or equity.
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