Business, 30.08.2021 17:00, dexterwilliams161

Adamo, a florist, operates retail stores in several shopping malls. The average selling price of an arrangement is $30 and the average cost of each sale is $18. A new mall is opening where Adamo wants to locate a store, but the location manager is not sure about the rent method to accept. The mall operator offers the following two options for its retail store rentals: 1. paying a fixed rent of $15,000 a month.
2. paying a base rent of $9,000 plus 10% of revenue received
3. paying a base rent of $4,800 plus 20% of revenue received up to a maximum rent of $25,000.

Required:
a. For each option (1, 2, and 3), compute the breakeven sales for that option and the monthly rent paid at break-even.
b. Show the sales levels at which each option is preferable.

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Adamo, a florist, operates retail stores in several shopping malls. The average selling price of an...