A retail tenant pays $3,000 monthly base rent plus 4% of gross sales exceeding $900,000 annually. If their annual sales are $1,200,000, what is their total annual rent?
Correct Answer
D) $48,000
Base rent = $3,000 × 12 = $36,000. Percentage rent = ($1,200,000 - $900,000) × 4% = $12,000. Total annual rent = $36,000 + $12,000 = $48,000. The percentage rent only applies to sales exceeding the breakpoint.
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