(Solved):Perform incremental analysis for the following options: Option 1 – rent out the warehouse for…

 

Question

Perform incremental analysis for the following options:

Option 1 – rent out the warehouse for $2400 per month, utilities are $350 per month.

Option 2- rent a smaller storefront space $1950 per month, utilities $250 per month.

Compare over one years’ time.

 

EXPERT ANSWER

Here we have two options, either we can rent out a warehouse for $2,400 per month or a store front for $1,950.

Clearly the rent income from warehouse is more, but its

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