Evan Has Just Been Hired as a Product Manager for a Major

question 211

Multiple Choice

Evan has just been hired as a product manager for a major technology firm. Currently, he is making purchases for his new apartment and upcoming job. His purchase of _____ would most likely be done through extended decision making, while his purchase of ____ would be purchased through limited decision making behavior.

• A)a new suit; a sofa
• B)a toaster; bed sheets
• C)coffee maker; flat screen TV
• D)flat screen TV; bath towels
• E)coffee maker; groceries

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Definitions:

Executory Costs

Costs related to the unperformed obligations under a lease, typically including insurance, maintenance, and taxes.

Minimum Lease Payments

The lowest amount that a lessee is obligated to pay over the lease term for the right to use an asset.

Rental Payments

Periodic payments made by a lessee to a lessor for the use of a property, vehicle, or equipment.

Capital Lease

A leasing arrangement that allows a lessee to record the leased asset as their own in their financial statements because it effectively transfers nearly all risks and rewards of ownership.