Calipers and More Is Weighing a Lease Versus a Purchase

question 74

Multiple Choice

Calipers and More is weighing a lease versus a purchase of some new machinery. The purchase price is $231,800. The equipment has a 4-year life after which time it is expected to have a resale
Value of $68,000. The equipment belongs in a 30 percent CCA class and the firm can borrow
Money at 9.5 percent. The equipment can be leased for $62,900 a year for 4 years. Calipers does
Not expect to owe any taxes for the next 4 years because of accumulated net operating losses.
What is the net advantage to leasing?

• A) -$36,209
• B) -$18,104
• C) $18,104
• D) $36,209
• E) $77,537

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Definitions:

Dislikes

Negative feelings or aversions individuals have towards specific objects, people, or situations.

Impression Management

The process by which people attempt to control or manipulate the perceptions others have of them, often to appear favorable or competent.

Reinforcement Schedule

A plan or pattern that dictates the timing and frequency of reinforcing consequences in order to modify behavior.

Desired Behavior

The specific actions or responses that an individual or organization aims to elicit from others, often through incentives or guidelines.