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MIKE restaurant sold a fast-food restaurant franchise to Irish. The sale agreement, signed in January 2010 called for a P100,000

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MIKE restaurant sold a fast-food restaurant franchise to Irish. The sale agreement, signed in January 2010 called for a P100,000 down payment plus two P50,000 annual payments representing the value of initial franchise services rendered by MIKE restaurant. In addition, the agreement required the franchisee to pay 8% of its gross revenues to the franchisor. The restaurant opened early in 2010 and its sales for the year amounted to P750,000. Assuming a 12% interest rate is appropriate, MIKE's 2010 total revenue will be (PV of an annuity of P1 at 12% for two periods is 1.6901)

Select one:

a. P84,505

b. P254,646

c. P244,505

d. P266,646

Expert Answer:

Answer rating: 100% (QA)

All Amounts are in P Q 1 Answer is 2nd Option P254 656 A Present value of payments View the full answer


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Related Book For  answer-question
Business Statistics

Business Statistics

ISBN: 978-0321930675

2nd edition

Authors: Robert A. Donnelly

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Posted Date: February 15, 2022 08:43:33
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