Hannah sells custom-ordered, fabric headbands over the internet for $10 each. The fabric and elastic used to
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1. Which alternative will provide her with a lower operating leverage? Briefly explain why.
2. At what level of sales (in units) will Hannah be indifferent between the two contract options?
3. If Hannah expects to sell 1,500 headbands per month during the coming year, which contract term should she choose (which would be the most profitable for her)?
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