Maxine's Is Considering Either Purchasing or Leasing a $600,000 Piece

question 64

Multiple Choice

Maxine's is considering either purchasing or leasing a $600,000 piece of specialized equipment. The equipment has a life of 5 years, belongs in a 30% CCA class, and will have no residual value.
The cost of debt is 12% for this purchase. A lease on the equipment for 5 years is priced at
$150,000 a year. Maxine's corporate tax rate is 34%. The lessor has a tax rate of 35%.
What is the amount of annual depreciation Maxine's can claim in the first year if the firm purchases
The equipment?

• A) $60,000
• B) $90,000
• C) $120,000
• D) $160,000
• E) $180,000

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Definitions:

Major Personality Change

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Psychosocial Development

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Entirely On Genetics

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