Alito Storage Is Debating Between Purchasing Some Equipment for $39,500

question 159

Multiple Choice

Alito Storage is debating between purchasing some equipment for $39,500 cash or leasing the equipment for $22,900 a year. The equipment only has a 2-year life after which time it is expected to have a parts resale value of $3,900. The equipment belongs in a 50 percent CCA class. Alito borrows money at 10.5 percent, and has sufficient tax loss carryovers to offset any potential taxable income the firm might have over the next five years. What is the net advantage to leasing?

• A) -$7,318
• B) -$5,048
• C) -$2,113
• D) $21
• E) $1,907

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Definitions:

Rogers

Refers to Carl Rogers, an influential American psychologist who founded the humanistic approach to psychology.

Unconditional Positive Regard

Unconditional Positive Regard is an attitude of acceptance and support towards another person, irrespective of their actions or feelings.

Carl Rogers

An influential American psychologist and one of the founders of humanistic psychology, known for developing client-centered therapy.

Albert Bandura

A psychologist known for his work on social learning theory, emphasizing the role of observational learning, imitation, and modeling in behavior.