Answer :
To determine which building is the most cost-effective for the Benton Company's expansion, we must compare the renting costs per square foot per year for each building, ensuring that the space meets the minimum requirement of 1,200 square feet.
Let's evaluate each building one by one:
### Building A:
- Dimensions: \( 25 \, \text{ft} \times 60 \, \text{ft} \)
- Area: \( 25 \times 60 = 1500 \, \text{sq ft} \)
- Rent: \$4,000 per month
Since the area of Building A (\( 1500 \, \text{sq ft} \)) is more than the minimum required space (\( 1200 \, \text{sq ft} \)), we can proceed to calculate the annual rent and cost per square foot:
- Annual Rent: \( 4,000 \times 12 = \$48,000 \)
- Cost Per Square Foot Per Year: \( \frac{48,000}{1500} = \$32.00 \, \text{per sq ft per year} \)
### Building B:
- Dimensions: \( 35 \, \text{ft} \times 35 \, \text{ft} \)
- Area: \( 35 \times 35 = 1225 \, \text{sq ft} \)
- Rent: \$36,000 per year
Since the area of Building B (\( 1225 \, \text{sq ft} \)) is also more than the minimum required space (\( 1200 \, \text{sq ft} \)), we proceed to calculate the cost per square foot:
- Annual Rent: \$36,000 (already given)
- Cost Per Square Foot Per Year: \( \frac{36,000}{1225} = \$29.39 \, \text{per sq ft per year} \)
### Building C:
- Dimensions: \( 28 \, \text{ft} \times 36 \, \text{ft} \)
- Area: \( 28 \times 36 = 1008 \, \text{sq ft} \)
- Rent: \$15,000 per 6 months
The area of Building C (\( 1008 \, \text{sq ft} \)) is less than the minimum required space (\( 1200 \, \text{sq ft} \)). Therefore, this building does not meet the space requirement and is not considered further.
### Summary:
- Building A:
- Area: 1,500 sq ft (meets requirement)
- Cost per sq ft per year: \$32.00
- Building B:
- Area: 1,225 sq ft (meets requirement)
- Cost per sq ft per year: \$29.39
- Building C:
- Area: 1,008 sq ft (does not meet requirement)
Building B offers the lowest cost per square foot per year among those that meet the minimum space requirement of 1,200 sq ft. Therefore, Building B is the most cost-effective option for the Benton Company’s expansion.
Let's evaluate each building one by one:
### Building A:
- Dimensions: \( 25 \, \text{ft} \times 60 \, \text{ft} \)
- Area: \( 25 \times 60 = 1500 \, \text{sq ft} \)
- Rent: \$4,000 per month
Since the area of Building A (\( 1500 \, \text{sq ft} \)) is more than the minimum required space (\( 1200 \, \text{sq ft} \)), we can proceed to calculate the annual rent and cost per square foot:
- Annual Rent: \( 4,000 \times 12 = \$48,000 \)
- Cost Per Square Foot Per Year: \( \frac{48,000}{1500} = \$32.00 \, \text{per sq ft per year} \)
### Building B:
- Dimensions: \( 35 \, \text{ft} \times 35 \, \text{ft} \)
- Area: \( 35 \times 35 = 1225 \, \text{sq ft} \)
- Rent: \$36,000 per year
Since the area of Building B (\( 1225 \, \text{sq ft} \)) is also more than the minimum required space (\( 1200 \, \text{sq ft} \)), we proceed to calculate the cost per square foot:
- Annual Rent: \$36,000 (already given)
- Cost Per Square Foot Per Year: \( \frac{36,000}{1225} = \$29.39 \, \text{per sq ft per year} \)
### Building C:
- Dimensions: \( 28 \, \text{ft} \times 36 \, \text{ft} \)
- Area: \( 28 \times 36 = 1008 \, \text{sq ft} \)
- Rent: \$15,000 per 6 months
The area of Building C (\( 1008 \, \text{sq ft} \)) is less than the minimum required space (\( 1200 \, \text{sq ft} \)). Therefore, this building does not meet the space requirement and is not considered further.
### Summary:
- Building A:
- Area: 1,500 sq ft (meets requirement)
- Cost per sq ft per year: \$32.00
- Building B:
- Area: 1,225 sq ft (meets requirement)
- Cost per sq ft per year: \$29.39
- Building C:
- Area: 1,008 sq ft (does not meet requirement)
Building B offers the lowest cost per square foot per year among those that meet the minimum space requirement of 1,200 sq ft. Therefore, Building B is the most cost-effective option for the Benton Company’s expansion.
