Use the Following Information to Answer the Question(s)below

question 21

Multiple Choice

Use the following information to answer the question(s) below.
Assume that it is 2012 and Rearden Metal is considering the purchase of a new blast furnace costing a total of $5 million.This furnace will qualify for accelerated depreciation: 20% can be expensed immediately,followed by 32%,19.2%,11.52%,11.52% and 5.76% over the next five years.However,because of Rearden's substantial tax loss carryforwards,Rearden estimates its marginal tax rate to be only 10% over the next five years.Since Rearden will get very little tax benefit from the depreciation expense,they consider leasing the furnace instead.Suppose that Rearden and the lessor face the same 8% borrowing rate,but the lessor has a 40% marginal tax rate.Assume that the furnace is worthless after five years,the lease term is five years,and a lease would qualify as a true tax lease.
-Assuming that Rearden's annual lease payments are $1.2 million,then the amount of the lease-equivalent loan is closest to:

• A)$3.8 million.
• B)$3.9 million.
• C)$4.0 million.
• D)$4.2 million.

Understand the relationship between socioeconomic status and personal values.

Comprehend the concept and impacts of gender-based occupational segregation.

Analyze the correlation between education levels and mortality rates.

Differentiate between occupational segregation based on job types and on ethnic or racial grounds.

---

Definitions:

Judgment

The cognitive process of assessing situations or information to form opinions or make decisions.

Sober Up

The process of becoming free from the effects of alcohol or drugs, regaining a clear state of mind and physical control.

Liver Function

The range of processes performed by the liver including detoxification, protein synthesis, and production of biochemicals necessary for digestion.

Cirrhosis

An irreversible condition, often caused by excessive drinking, in which the liver becomes scarred and begins to change in anatomy and functioning.