Heidi Incis Considering Whether to Lease or Purchase a Piece of of Equipment.The

question 86

Multiple Choice

Heidi Inc.is considering whether to lease or purchase a piece of equipment.The total cost to lease the equipment will be $120,000 over its estimated life,while the total cost to buy the equipment will be $75,000 over its estimated life.At Heidi's required rate of return,the net present value of the cost of leasing the equipment is $73,700 and the net present value of the cost of buying the equipment is $68,000.Based on financial factors,Heidi should:

• A)lease the equipment,saving $45,000 over buying.
• B)buy the equipment,saving $45,000 over leasing.
• C)lease the equipment,saving $5,700 over buying.
• D)buy the equipment,saving $5,700 over leasing.

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Definitions:

Continuous Schedules

Work or production schedules that operate non-stop, often on a 24/7 basis, to ensure uninterrupted operations.

Regular Performance

The consistent or usual level of productivity or efficiency achieved by an individual or organization.

Reinforcer

Something that increases the likelihood of a behavior being repeated, often used in the context of behavioral psychology.

Social Learning Theory

A theory that suggests people learn new behaviors by observing and imitating others, alongside direct reinforcement or punishment.