o locate a store, but the location manager is not sure about the rent method to accept. The mall operator offers the following three options for its retail store rentals:
1. paying a fixed rent of $17,500 a month, or
2. paying a base rent of $10,000 plus 10% of revenue received, or
3. paying a base rent of $5,500 plus 20% of revenue received
Required:
•Calculate the break-even in units under each option.
•Calculate the net income under each option assuming that units sold are 5,000.
•Which option should Karen choose?