Property Valuation
An Alaska retail property has a base rent of $15/sq ft for 8,000 sq ft plus percentage rent of 5% of annual gross sales over $500,000. Tenant's gross sales are $750,000. What is the total annual rent?
A$120,000
B$132,500✓ Correct
C$112,625
D$130,000
Explanation
Base rent = 8,000 × $15 = $120,000. Overage = $750,000 − $500,000 = $250,000. Percentage rent = $250,000 × 5% = $12,500. Total = $120,000 + $12,500 = $132,500.
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