Question
Columbus Prime Properties, Inc owns a two-story building in the uptown Columbus, GA. The company has a tenant in the first floor. The company is
Columbus Prime Properties, Inc owns a two-story building in the uptown Columbus, GA. The company has a tenant in the first floor. The company is considering an offer from a potential tenant for an annual lease on the second floor. If the company decides to lease the second floor, it expects to incur, among other things, a total of $6,000 annual maintenance costs for the entire building, which currently costs $5,000 a year with only one tenant in the first floor. How much of the maintenance costs should the company consider in the capital budgeting analysis on the new lease?
$6,000
$3,000
$1,000
$0
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