Devon Corp

question 77

Multiple Choice

Devon Corp.is trying to decide whether to lease or purchase a piece of equipment.The total cost lease the equipment will be $150,000 over its estimated life,while the total cost to buy the equipment will be $120,000 over its estimated life.At Devon's required rate of return,the net present value of the cost of leasing the equipment is $108,000 and the net present value of the cost of buying the equipment is $119,000.Based on financial factors,Devon should:

• A)lease the equipment,saving $30,000 over buying.
• B)buy the equipment,saving $30,000 over leasing.
• C)lease the equipment,saving $11,000 over buying.
• D)buy the equipment,saving $11,000 over leasing.

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Definitions:

Civil Liberties

Fundamental rights and freedoms protected by law from governmental interference or deprivation, including freedom of speech, the right to privacy, and the right to fair treatment under the law.

Enola Gay

The American B-29 bomber that dropped the first atomic bomb on Hiroshima, Japan, on August 6, 1945, during World War II.

Soft Power

The ability of a country to persuade others to do what it wants without force or coercion, often through cultural influence and diplomacy.

Displaced Persons Act

A law enacted by the United States in 1948 to help European refugees displaced by World War II, allowing for their admission into the U.S. beyond existing immigration quotas.