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.

Question

Tiffany Russell

Business

12 November, 17:25

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.

+5

Answers (1)

Know the Answer?

Watson · Answer 1

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.