CITE SOURCE TO Costs: The lease cost for the truck is $350/week. The insurance cost is $70/week. The cost of fuel that will be used by the customer is 100 gallons * $2.95/gallon (wholesale price) = $295. The cost per mile for the first 500 miles is covered in the lease cost. Any additional miles will not cost you anything extra because the customer will pay for them. Revenues: The customer will pay $500 for the rental. If the customer drives more than 500 miles, you will earn an additional $.50/mile. Calculate the net income from this deal. The total cost is $350 (lease) + $70 (insurance) + $295 (fuel) = $715. The revenue is $500 from the rental, plus any additional revenue from extra miles driven. If the customer doesn't drive more than 500 miles, you would have a net loss of $215 ($715 - $500). However, if the customer drives more than 500 miles, you will start making a profit after the customer drives an additional 430 miles (since $215 / $.50/mile = 430 miles). Regarding the second part of your question, if your fuel supplier limited the amount of fuel you could purchase at the wholesale price, it would increase your costs if you needed to buy more than 100 gallons in a week. However, in this scenario, the customer is only using 100 gallons, so it wouldn't affect this particular deal