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The Wheeler Wheat Farm Has a Long-Term Lease on 5000

Question 93

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The Wheeler Wheat Farm has a long-term lease on 5000 acres of land in Saskatchewan.The annual lease payment is $240,000.Prior to planting in the spring of 2015,the farm's economist predicted that the farm would have $135,000 left after paying all of its costs except the annual lease payment.In this case,what should the Wheeler Wheat Farm do

The Wheeler Wheat Farm has a long-term lease on 5000 acres of land in Saskatchewan.The annual lease payment is $240,000.Prior to planting in the spring of 2015,the farm's economist predicted that the farm would have $135,000 left after paying all of its costs except the annual lease payment.In this case,what should the Wheeler Wheat Farm do


A) it should continue to operate because total revenue exceeds total cost.
B) it should continue to operate even though it predicts an accounting loss of $105,000.
C) it should shut down and experience an accounting loss of $135,000.
D) it should exit the market and experience an accounting loss of $240,000.

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