Panera Bread is looking very closely at each and every company-owned and operated store to determine whether they should stay open or closed. The store in the mall had annual revenue of $1.2 million. Its operating costs (labor, energy, materials, taxes) were $1.0 million. The store has a ten year lease with the shopping center and must pay $300,000 a year ($0.3 million) in rent. It cannot get out of the lease unless the entire Panera Bread chain goes under. Based upon what you have learned in MBA 505 so far, what would you advise Panera to do about the store in the Mall?

Select one:

A.Continue to operate because revenues cover variable costs

B.Sign an extended lease for another 10 years

C.Close the store because it is losing money

D.Raise prices on all items by 10 percent to cover the loss