The Owner of a Local Restaurant Is Deciding Whether to Lease

question 89

Short Answer

The owner of a local restaurant is deciding whether to lease a company van. If the van is leased, the company would avoid paying its vendors to deliver the supplies and food purchases. The owner has negotiated a potential lease contract that would require a down payment plus a flat monthly rental payment. At the end of each year, an additional "contingency" rental payment would be required if the total number of kms driven exceeds 8,000. The owner has estimated that the van will be driven 600 kms per month for picking up supplies and food purchases, so she does not expect to incur a contingency annual payment. Based on these kms, the owner has calculated the expected amount of cost for fuel, repairs, and maintenance. She has received a quote from her insurance company for the next six months' insurance. She plans to hire a part-time employee at $10 per hour to drive the van. The employee will work a flexible schedule based on the deliveries required. Items 1 through 7 are relevant costs for this decision. Indicate whether the dollar amount of each relevant cost is most likely (C)certain or (U)uncertain. Each numbered item has only one correct response.
____ 1. Lease down payment
____ 2. Monthly lease rental payments
____ 3. Contingency annual payment
____ 4. Fuel, repairs, and maintenance
____ 5. Van insurance for the next six months
____ 6. Part-time employee wages
____ 7. Reduction in vendor delivery charges

Understand the impact of social, economic, and environmental values in identifying entrepreneurial opportunities.

Grasp the various pathways to opportunity identification and their relative complexities and values.

Understand the classification of lipids and their chemical structures.

Recognize the biochemical formation and transformation processes of lipids.

---

Definitions:

Expiration

The process of expelling air out of the lungs during breathing; also refers to the end of a product's validity period.

Precordial Assessment

An evaluation of the front part of the lower chest wall, often to check for heart anomalies or abnormalities.

Apical Impulse

The pulse felt at the apex of the heart, typically located in the fifth left intercostal space at the midclavicular line.

Midclavicular Line

An imaginary line running vertically down the surface of the body passing through the midpoint of the clavicle, often used as a reference in medical examinations.