Olga Counterman’s motel and restaurant rents its facilities from Z-B Corporation. Olga has been paying 10% of the motel and restaurant's total sales to Z-B. This past year the sales breakdown was as follows:

Rooms $4,500,000 Food 800,000 Telephone 50,000 Miscellaneous 50,000 Total $5,400,000 Z-B Corporation has made two proposals to Olga regarding a new 5-year lease contract:
em Proposal A: Fixed rent of $60,000 per month, due at the beginning of each month # ProposalB: — Variable rent—due at the end of each year—as follows:
12% of room sales; 3% of food sales; 2% of other sales Olga expects total sales to increase by 20% each year over the next 5 years, and the sales mix is expected to remain constant. Her firm’s discount rate is 12%.
Required:
Identify which proposal Olga should choose and explain why.