Boss Company Currently Leases a Delivery Van from Check Enterprises

question 44

Multiple Choice

Boss Company currently leases a delivery van from Check Enterprises for a fee of £250 per month plus £0.40 per mile. Management is evaluating the desirability of switching to a modern, fuel-efficient van, which can be leased from David, SA., for a fee of £600 per month plus £0.05 per mile. All operating costs and fuel are included in the rental fees. In general,

• A) a lease from David, SA., is economically preferable to a lease from Check Enterprises regardless of the monthly use.
• B) a lease from Check Enterprises is economically preferable below 1,000 miles per month.
• C) a lease from Check Enterprises is economically preferable to a lease from David, SA., regardless of the monthly use.
• D) a lease from Check Enterprises is economically preferable above 1,000 miles per month.

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Definitions:

Countertrade Deals

Transactions where goods and services are exchanged directly for other goods and services, without using currency as an intermediary.

Heavy Debt Burdens

Refers to situations where individuals, companies, or countries owe large amounts of money, making it difficult to manage finances or invest for the future.

Little or No Investment

Situations or ventures that require minimal to no financial outlay to start or maintain.