What would you do and why? First fill in the rental payment grid using the current lease, the new lease at the same location and the new location. Use sales of $450,000, $500,000, $550,000, 600,000, $650,000. Use the following grid for your work.

Analysis:

The rental payments and various sales levels are shown below:

Present Lease--$27/square foot + 4% overage after $300,000
Sales Volume	$450,000	$500,000	$550,000	$600,000	$650,000
Cost per Sq. Ft.
Overage
New Lease--$45/square foot + 10% overage after $500,000
Sales Volume	$450,000	$500,000	$550,000	$600,000	$650,000
Cost per Sq. Ft.
Overage
GeorgetownPark--$60/sqare foot + 8% overage after $450,000
Sales Volume	$450,000	$500,000	$550,000	$600,000	$650,000
Cost per Sq. Ft.
Overage

After reviewing the financial information answer whether you would move or not and why.

2. Now prepare an income statement for the different locations assuming sales of $550,000 a fixed overhead of $150,000salaries for salespeople and owner, a realized gross margin of 50 percent, and advertising expenses of $40,000 in the present location.

Sales

- CoGS

= Gross Marin

- Fixed Overhead

- Advertising

=Income