DogChew Products Needs to Replace Its Rawhide Tanning and Molding

question 116

Multiple Choice

DogChew Products needs to replace its rawhide tanning and molding equipment. It can be used for five years and will have no salvage value. The equipment costs $930,000. The firm can lease it for $245,000 a year, or it can borrow the money to purchase the equipment at 9%. The firm's tax rate is 39%. The CCA rate is 20% (Class 8) .

What is the after-tax lease payment?

• A) $95,550
• B) $106,150
• C) $123,350
• D) $149,450
• E) $245,000

---

Definitions:

Norman Triplett

An American psychologist known for his work on social facilitation and considered a pioneer in the field of social psychology.

Deindividuation

A psychological state where an individual loses their sense of self-identity and personal responsibility, often leading to behavior that is uncharacteristic or norm-violating when in a group.

Student Protest

Refers to demonstrations or movements initiated by students to voice their opposition to certain policies, actions, or societal issues.

Social Facilitation Theory

The idea that the presence of others affects an individual's performance, often enhancing the performance on simple tasks and impairing it on complex tasks.