treysonrunyan5715 treysonrunyan5715

02-07-2021
Business

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Suppose a company owns a warehouse that costs $500,000 and depreciates at $10,000 per year. If the interest rate is 5%, what is the implicit rental price of the warehouse

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Parrain Parrain

06-07-2021

Answer: $35,000

Explanation:

Implicit rental price = Interest payment + Depreciation

Interest payment = 5% * 500,000

= $25,000

Implicit rental price is therefore:

= 25,000 + 10,000

= $35,000

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