Assume That Vivid Co

question 14

Multiple Choice

Assume that Vivid Co.is considering disposing of equipment that cost $350,000 and has $280,000 of accumulated depreciation to date.Vivid Co.can sell the equipment through a broker for $135,000 less 5% commission.Alternatively, Comet Co.has offered to lease the equipment for five years for a total of $235,000.Vivid will incur repair, insurance, and property tax expenses estimated at $60,000.At lease-end, the equipment is expected to have no residual value.The net differential income from the lease alternative is:

• A) $135,000.
• B) $235,000.
• C) $100,000.
• D) $46,750.

---

Definitions:

Power Distance

A cultural system emphasizing formality and greater difference in power among people.

Relationship Mobility

The degree to which individuals in a society feel free to choose and switch their interpersonal relationships and social groups.

Collectivistic Cultures

Societies where individuals prioritize the group's needs and goals over their own, emphasizing community, cooperation, and interdependence.

Power Distance

A cultural dimension that describes the extent to which individuals in a society accept and expect power to be distributed unequally.