Your Company Is Considering the Purchase of a Fleet of Cars

question 40

Multiple Choice

Your company is considering the purchase of a fleet of cars for $195,000. It can borrow at 8.5%. The cars will be used for four years. At the end of four years they will be worthless. You call a leasing agent and find that the cars can be leased for $55,000 per year. The corporate tax rate is 34% and the cars belong in CCA class 10 (a 30% class) , what is the net advantage to leasing?

• A) $6,594
• B) $9,988
• C) $10,134
• D) $15,363
• E) $21,802

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Definitions:

Internal Environment

Refers to the conditions and processes within an organism or organization that contribute to its functioning.

Appropriate Tasks

Activities or duties that are suitable or fitting for a specific person, situation, or environment.

Anterior

Before or in front of.

Pathophysiology

The study of how normal physiological processes are affected by disease, leading to the functional changes associated with health conditions.