If a Firm Does Not Expect to Owe Taxes for a Few

question 136

Multiple Choice

If a firm does not expect to owe taxes for a few years and needs some equipment, the firm should:

• A) Lease the equipment and retain the tax benefits.
• B) Lease the equipment with the lessor retaining the tax ownership of the asset.
• C) Borrow the money to buy the asset and then depreciate it using CCA depreciation.
• D) Buy the equipment with cash and depreciate it using CCA.
• E) Buy the equipment and depreciate it straight-line over the life of the asset.

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Definitions:

Universal Instantiation

A logical rule that allows one to deduce that a statement applies to specific instances given it holds for all instances.

Modus Tollens (MT)

A form of logical argument where the denial of the consequent leads to the denial of the antecedent.

Simplification (Simp)

A logical operation that breaks down complex arguments or propositions into simpler components.

Modus Ponens (MP)

A form of valid argument in deductive logic that, if a given premise is true ('if P then Q'), and the antecedent (P) is also true, then the consequent (Q) must be true.