Question

Jama has just become owner of a franchise

fast-food restaurant. He pays an initial fee of
$150,000 plus $8,000 per month for advertising
and management support to the franchisor. How
much will he pay in all to the franchisor during his
first year in business?

Answer 1

$246,000

Step-by-step explanation:

Jama will pay the initial fee plus 12 monthly payments to the franchisor in his first year.

The initial fee is $150,000

Monthly payments are $8000.

For the year, the monthly payments will total

=$8,000 x 12

=$96,000

In total, he will pay

=$96,000 +$150,000

=$246,000