Financial Accounting, 9th Edition

9 Plant Assets, Natural Resources, and Intangible Assets

Feature Story How Much for a Ride to the Beach?

It's spring break. Your plane has landed, you've finally found your bags, and you're dying to hit the beach—but first you need a “vehicular unit” to get you there. As you turn away from baggage claim, you see a long row of rental agency booths. Many are names you are familiar with—Hertz, Avis, and Budget. But a booth at the far end catches your eye—Rent-A-Wreck. Now there's a company making a clear statement!

Any company that relies on equipment to generate revenues must make decisions about what kind of equipment to buy, how long to keep it, and how vigorously to maintain it. Rent-A-Wreck has decided to rent used rather than new cars and trucks. It rents these vehicles across the United States, Europe, and Asia. While the big-name agencies push vehicles with that “new car smell,” Rent-A-Wreck competes on price.

Rent-A-Wreck's message is simple: Rent a used car and save some cash. It's not a message that appeals to everyone. If you're a marketing executive wanting to impress a big client, you probably don't want to pull up in a Rent-A-Wreck car. But if you want to get from point A to point B for the minimum cash per mile, then Rent-A-Wreck is playing your tune. The company's message ...