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When Arnold opened his auto parts shop, he decided to buy a franchise. His franchise obligations include 3% of his gross sales as a royalty
- When Arnold opened his auto parts shop, he decided to buy a franchise. His franchise obligations include 3% of his gross sales as a royalty and 2% of his gross sales for cooperative advertising charges. The average cost of the parts he sells is 60% of his retail sales price. His parts shop is at an attractive location, he employs five people, and he pays himself well. His overhead is substantial - $70,000 per month.
- How much (dollar amount) does he need to sell to break even?
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