Randall Corp

question 40

Multiple Choice

Randall Corp.is trying to decide whether to lease or purchase a piece of equipment needed for the next five years.The equipment would cost $100,000 to purchase,and maintenance costs would be $10,000 per year.After five years,Randall estimates it could sell the equipment for $30,000.If Randall leases the equipment,it would pay $30,000 each year,which would include all maintenance costs.If the hurdle rate for Randall is 12%,Randall should: (Future Value of $1,Present Value of $1,Future Value Annuity of $1,Present Value Annuity of $1. ) (Use appropriate factor from the PV tables.Do not round intermediate calculations.Round your final answer to the nearest hundred. )

• A)lease the equipment,as net present value of cost is about $11,000 less.
• B)buy the equipment,as net present value of cost is about $11,000 less.
• C)lease the equipment,as net present value of cost is about $30,000 less.
• D)buy the equipment,as net present value of cost is about $30,000 less.

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Definitions:

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Physiological Arousal

The body's response to external stimuli, resulting in physical and psychological reactions such as increased heart rate or heightened alertness.

Catharsis

The process of releasing, and thereby providing relief from, strong or repressed emotions, often through art, drama, or psychological means.

Handling Anger

Methods or strategies used by individuals to manage and express anger in a healthy and constructive manner.