irm commitment versus best efforts. Astro Investment Bank offers Lunar Vacations the following options on its initial public sale of equity:

(a)

a best efforts arrangement whereby Astro will keep

2.7%

of the retail sales or

(b)

a firm commitment arrangement of

$10,200,000.

Lunar plans on offering

1,000,000

shares at

$11.29

per share to the public. If it sells

100%

of the shares, which is the better choice for Lunar Vacations? Which is the better choice for Astro Investment Bank?

Question content area bottom

Part 1

Under the best efforts arrangement, what are the proceeds for Lunar Vacations?

$enter your response here

(Round to the nearest dollar.)