Assume you have a restaurant operation and the property owner has offered a 5-year fixed lease rental of $42,000 per year or variable lease rental of 10% of your sales revenue. Your current sales revenue in the new year is projected to be $505,000. Find the indifference point (the breakeven point of sales revenue at which the fixed rent and variable rent for a year are the same). Explain which alternative you would accept.

LO1