Karen Hefner, a Florist, Operates Retail Stores in Several Shopping

question 85

Essay

Karen Hefner, a florist, operates retail stores in several shopping malls. The average selling price of an arrangement is $30 and the average cost of each sale is $18. A new mall is opening where Karen wants to locate a store, but the location manager is not sure about the rent method to accept. The mall operator offers the following three options for its retail store rentals:
Required:
a. For each option, compute the breakeven sales and the monthly rent paid at break-even.
b. Beginning at zero sales, show the sales levels at which each option is preferable up to 5,000 units.

---

Definitions:

Unilateral Mistake

A situation in contract law where only one party is mistaken about a basic assumption on which a contract is made, which can impact the enforceability of the contract.

Mistake

An incorrect belief or understanding regarding a fact, judgment, or event that can affect the validity of a contract.

Avoidance

The legal process or action taken to nullify or declare a transaction void, preventing its enforcement.

Duress

involves the use of force, threat, or coercion to compel someone to act against their will or judgment.