If Frank is offered $20k for his book plus a $3 royalty/book in deal a, and deal b says he can have $15k up front but $4.25 per book that sells, how many books can Frank sell before deal b is better than deal a?
If Frank is offered $20k for his book plus a $3 royalty/book in deal a, and deal b says he can have $15k up front but $4.25 per book that sells, how many books can Frank sell before deal b is better than deal a?
Let the number of books sold to break even=B, then we have:
20,000 + 3B =15,000 + 4.25B
5,000 =1.25B
B=5,000 / 1.25
B = 4,000 books to break even.
Any number > 4,000 books sold, deal "b" will be a better deal.
