*3. Luxor Travel arranges I-week tours to southern Egypt. The agency is contracted to provide tourist groups with 7,4,7, and 8 rental cars over the next 4 weeks, respectively. Luxor Travel subcontracts with a local car dealer to supply rental needs. The dealer charges a rental fee of $220 per car per week, plus a flat fee of $500 for any rental transaction.

Luxor, however, may elect not to return the rental cars at the end of the week, in which case the agency will be responsible only for the weekly rental ($220). What is the best way for Luxor Travel to handle the rental situation?