Nason Farms Is Considering the Purchase of a Delivery Truck

question 46

Multiple Choice

Nason Farms is considering the purchase of a delivery truck costing $39,000. The truck will be used for 3 years and then it will be worthless. The financing rate for the purchase is 8 percent and
The corporate tax rate is 35 percent. The firm uses straight-line depreciation. What is the break-even
Lease payment amount?

• A) $15,115
• B) $17,318
• C) $17,546
• D) $21,038
• E) $23,254

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Definitions:

Frito-Lay

A subsidiary of PepsiCo, specializing in the manufacture and distribution of snack foods.

Inventory

The total amount of goods or materials a business holds, intended for sale or use in production, often managed to optimize supply chain efficiency.

Order Taker

An individual or system in charge of receiving and processing customer orders without engaging in proactive selling activities.

Routine Orders

Regular, repeated purchase orders for goods or services that are used on a consistent basis in a company's operations.