Following Is Selected Financial Information for Universal Skyhook Skyhook Installed a New Giant Forging Machine on January 1

question 54

Essay

Following is selected financial information for Universal Skyhook:
$\begin{array}{lr}&\underline{2006}\\\text { Capitalized leases } & \$ 4,100 \\\text { Total assets } & 18,000 \\\text { Total liabilities } & 10,000\\\\\text { Depreciation expense } & 1,000 \\\text { Rent expense } & 2,000 \\\text { Interest expense } & 1,000 \\\text { Net income } & 1,200\\\\\text {Cash flow}&2,000\end{array}$
Skyhook installed a new giant forging machine on January 1, 2006. It was financed as a five-year capitalized lease with year-end payments of $1,002 with an implied 8% interest rate. After the lease period, the scrap value will just about cover the cost to remove the machine. Skyhook had no tax expense in 2006 and uses straight-line depreciation for book and tax purposes.

a. The company is examining financing alternatives for another machine and has received a synthetic lease proposal from a bank. To better understand this structure, the CEO asks you how the above 2006 numbers would have changed had Skyhook used a synthetic lease for the forging machine.
b. How would you interpret your results and what would your recommendation be?
c. Would your recommendation change if Skyhook had a tax rate of 36% and used accelerated depreciation for tax purposes?

Analyze the interconnectedness of film genres and thematic concerns in early cinema.

Evaluate the role of studios and filmmakers in shaping the film industry's structure.

Decode the transition from silent to sound films and its impact on film comedy.

Distinguish the aesthetic practices used by filmmakers to create meaning in silent films.

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Definitions:

Upside-Down Pyramid

The upside-down pyramid puts customers at the top; served by workers whose managers support them.

Decision-Making Process

A systematic approach to making choices among various options based on the analysis and evaluation of factors influencing the decision.

Operating Workers

Employees directly involved in the production of goods or delivery of services in an organization.

Department Supervisor

A managerial position responsible for overseeing the day-to-day operations and performance of a specific department within an organization.