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17 December, 02:19

Enok, a prospective franchise owner, is looking to keep his monthly costs as low as possible. The franchisor he is checking out is advertising that royalty payments of 8% of sales could be as high as $300,000 per month. The franchisor is claiming that a franchisee can expect monthly sales to be as high as

(1) $300,000.

(2) $3,125,000.

(3) $3,750,000.

(4) $3,000,000.

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Answers (1)
  1. 17 December, 03:02
    0
    Option (3) is correct.

    Explanation:

    Given that,

    Enok, a prospective franchise owner,

    Royalty payments = 8 percent of sales could be as high as $300,000 per month

    Therefore, the franchiser is claiming that a franchisee can expect monthly sales to be as high as:

    = $300,000 * (100 : 8)

    = $300,000 * 12.5

    = $3,750,000

    Option (3) is correct.
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