Homework answers / question archive / With the rapid expansion of AKE business, Adam is contemplating on the idea of  opening 1 more branch at strategic location in a new housing area

With the rapid expansion of AKE business, Adam is contemplating on the idea of  opening 1 more branch at strategic location in a new housing area

Business

Share With

With the rapid expansion of AKE business, Adam is contemplating on the idea of  opening 1 more branch at strategic location in a new housing area. The options available        are either to rent the premises or to buy them. For the rental option, it will cost AKE  RM3,500 a month for a single unit. On the other hand, the price of a single shop lot is  RM450,000. The deposit required is RM50,000 for a unit while the balance will be             financed through bank loan for 20 years with an estimated monthly loan instalment of       RM2,800. Critically assess these two options and explain to Adam how each of the    options will be impacting the operational costs of AKE.