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The owner of the River Front Restaurant is renegotiating the operations lease and has the...

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Accounting

The owner of the River Front Restaurant is renegotiating the operations lease and has the option of either (1) an annual fixed lease of $65,000 or (2) a variable lease set at 5% of annual revenue. Which option costs less if annual revenue is expected to be $1,200,000?

a. The fixed lease

b. The variable lease

c. Cannot be determined from the information given

d. Both options cost the same

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