Data on Mertz Co A) $764
B) $849
C) $943
D) $1,048
E) $1,164

question 25

Multiple Choice

Data on Mertz Co.for the most recent year are shown below, along with the payables deferral period (PDP) for the firms against which it benchmarks.The firm's new CFO believes that the company could delay payments enough to increase its PDP to the benchmarks' average.If this were done, by how much would payables increase? Use a 365-day year. $\begin{array}{lr}\text { Cost of goods sold = } & \$ 75,000 \\\text { Payables }= & \$ 5,000 \\\text { Payables deferral period (PDP) = } & 24.33 \\\text { Benchmark payables deferral period }= & 30.00\end{array}$

• A) $764
• B) $849
• C) $943
• D) $1,048
• E) $1,164

Analyze the impact of salvage value on the net advantage to leasing.

Calculate and interpret break-even lease payments.

Appreciate the significance of cost of debt in leasing versus buying decisions.

Understand the role of CCA (capital cost allowance) classes in the context of depreciation for leasing and buying analysis.

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Definitions:

Opossum

is a type of marsupial found in the Americas, known for playing dead as a defense mechanism.

Monotremes

Egg-laying mammals such as the duck-billed platypus of Australia.

Oviparous

Referring to organisms that lay eggs, with embryos developing and hatching outside the mother's body.

Amniotic Egg

An egg that contains amniotic fluid to protect and hydrate the embryo; a key adaptation for life on land found in reptiles, birds, and mammals.