Floral Charms offers free delivery as a service to its customers. For years, a local...

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Accounting

Floral Charms offers free delivery as a service to its customers. For years, a local delivery company has provided the service. Business has increased substantially and, on average, 300 deliveries per month are made. The delivery firm has just increased its charges to $20 for every delivery.Maja Horvat, the owner, has asked the store accountant to compare the present delivery charges with the cost of buying and operating the company's own van. The accountant has determined several facts:* A delivery van would cost $37000.* The van would last four years and then would be worth $10000 as a trade-in.* The driver's salary would be about $27 per hour, including all fringe benefits; the driver would work an average of 30 hours per week.* Insurance, repairs and maintenance, licenses, and fuel would average $10950 per year.
Questions1: What is more economical, buying the delivery equipment or using the services of the cartage firm?
Question 2: List factors other than costs that could affect the decision.

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