Windsor Fashion Company enters into a lease arrangement with Highpoint Leasing for 5 years. Windsor agrees to pay 4% of its net sales as a variable lease payment. Windsor does not pay any fixed payments. Windsor is a highly successful company that has achieved over $1,400,000 in net sales over the last 7 years. Both Windsor and Highpoint forecast that net sales will be a much greater amount than $1,400,000 in subsequent years. As a result, it is highly certain that Windsor will make payments of at least $56,000 ($1,400,000 × 4%) each year. What is the lease payment amount Windsor should use to record its right-of-use asset?

Match the given situations to the type of risks that a business may face while taking credit. 1. beta ltd. had taken a loan from a bank for a period of 15 years, but its sales are gradually showing a decline. 2. alpha ltd. has taken a loan for increasing its production and sales, but it has not conducted any research before making this decision. 3. delphi ltd. has an overseas client. the economy of the client’s country is going through severe recession. 4. delphi ltd. has taken a short-term loan from the bank, but its supply chain logistics are not in place. a. foreign exchange risk b. operational risk c. term of loan risk d. revenue projections risk