(Answered) Problemassume you have a restaurant in operation and the

Accounting

Problem

Assume you have a restaurant in operation and the property owner has offered a 5-year fixed lease rental of $42,000 per year or a variable lease rental of 10% of your sales revenue. Your current sales revenue in the new year is projected to be $505,000. Find the indifference point (the break even point of sales revenue at which the fixed rent and variable rent for a year are the same). Explain which alternative you would accept.

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