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Question: 21An entrepreneur wants to rent store space in a new shopping mall for the 3-month holiday shopping season. The entrepreneur believes he has a
Question: 21An entrepreneur wants to rent store space in a new shopping mall for the 3-month holiday shopping season. The entrepreneur believes he has a new product available that has the potential for good sales. The product can be obtained on consignment at the cost of \$20 per unit, and he expects to sell the item for $100 per unit. Due to other business ventures, the entrepreneur's risk tolerance is low. He recognizes that, as the product is entirely new, there is an element of risk. The mall management has offered the entrepreneur three rental options: (1) a fixed fee of $8,000 per month, (2) a fixed fee of $3,990 per month plus 10% of the entrepreneur's revenue, or (3) 30% of the entrepreneur's revenues. Which one of the following actions would you recommend to the entrepreneur? A. Choose the first option no matter what the entrepreneur expects the revenues to be. B. Choose the second option no matter what the entrepreneur expects the revenues to be. C. Choose the second option only if the entrepreneur expects revenues to exceed $5,700. D. Choose the third option no matter what the entrepreneur expects the revenues to be
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