Als street sweeping business has expanded to include oversized trash pickup and snowplowing services in winter. He has numerous potential customers requesting his services. Which of these customers will generate the highest gross revenue for the next year?

Als street sweeping business has expanded to include oversized trash pickup and snowplowing services in winter. He has numerous potential customers requesting his services. Which of these customers will generate the highest gross revenue for the next year?

• A. An apartment complex paying $450 a month
• B. A single-family home
• C. A small business
• D. A city government contract

Answer: (A)

Focus on how revenue accumulates over time. When you have a recurring monthly contract, you multiply the monthly amount by the number of months in a year to get annual revenue. In this case, the apartment complex pays a fixed amount each month, so the annual revenue is 450 dollars times 12 months, which equals 5,400 dollars for the year. The other options don’t specify a fixed monthly rate or the total annual amount, so they don’t provide a guaranteed annual figure the same way. Therefore, with the given data, the apartment complex contract yields the highest gross revenue for the next year.

Focus on how revenue accumulates over time. When you have a recurring monthly contract, you multiply the monthly amount by the number of months in a year to get annual revenue. In this case, the apartment complex pays a fixed amount each month, so the annual revenue is 450 dollars times 12 months, which equals 5,400 dollars for the year. The other options don’t specify a fixed monthly rate or the total annual amount, so they don’t provide a guaranteed annual figure the same way. Therefore, with the given data, the apartment complex contract yields the highest gross revenue for the next year.