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please give me answer step by step for my understanding and my learning and all calculations formulas mention thanks 14. Nevada Flower Creations operates retail
please give me answer step by step for my understanding and my learning and all calculations formulas mention thanks
14. Nevada Flower Creations operates retail stores in shopping malls. The average selling price of an arrangement is $25. The average cost of each sale is $15. A new mall is opening where Nevada Flower Creations wants to locate a store, but the location manager is not sure about the rent method to accept. The mall operators offer three options for its retail store rentals as follows: 1. Paying a fixed rent of $12,500 a month, 2. Paying a base rent of $10,000 plus 8% of revenue received, or 3. Paying a base rent of $5,000 plus 20% of revenue received up to a maximum rent of $20,000. Required: a. Compute the break-even sales of each option and the monthly rent paid at break-even. b. At what sales level is the manager indifferent between Options 2 and 3? c. Beginning at zero sales, show the sales levels at which each option is preferable up to 5.000 unitsStep by Step Solution
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