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Question - A restaurant projected sales rev is $400,000 this year. The manager is choosing between a fixed rent of $30,000 and a variable rent of 10% of revenue for the year. What is the amount of revenue that manager will be indifference between choosing the two types of rent? Which rent should she choose based on the revenue forecast?
1) indifference revenue= $300,000; choose fixed rent
2) indifference revenue= $300,000; choose variable rent
3) indifference revenue= $400,000; choose fixed rent
4) none of above
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