Question
Viviane Alessi, owner of Chez Nous Caf, is negotiating with the lessor regarding the lease of the building for the next five years. The lessor
Viviane Alessi, owner of Chez Nous Caf, is negotiating with the lessor regarding the lease of the building for the next five years. The lessor has proposed the following lease payment alternatives. Option 1: $5,000 fixed rent per month Option 2: $2,000 fixed rent per month plus 3 percent of sales Option 3: $2,500 fixed rent per month plus 5 percent of monthly sales in excess of $ 50,000 Please use no decimals for the monetary units. Round up the number equal to and above 0.5. Please show your working outs. Question: If expected average net sales are $600,000 (annual sales), which lease payment alternative should be recommended to Vivian Alessi
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