Your fiRm Is Considering Either Leasing or Buying Some New

question 152

Multiple Choice

Your firm is considering either leasing or buying some new equipment. The lease payments will be $21,000 a year. The purchase price is $59,000. The equipment has a 3-year life after which time it is
Expected to have a resale value of $22,000. The equipment belongs in a 25 percent CCA class.
Your firm borrows money at 8 percent, and normally has a 34 percent tax rate. The company does
Not expect to owe any taxes for at least 5 years because they have accumulated net operating
Losses. What is the incremental cash flow for year 2 if the company decides to lease the equipment
Rather than purchase it?

• A) -$24,613
• B) -$22,702
• C) -$21,000
• D) -$20,533
• E) -$20,114

Gain insight into statistical decision-making and hypothesis testing at various significance levels.

Understand how to calculate p-values and their role in hypothesis testing.

Differentiate between the types of data (nominal, ordinal, interval) and appropriate statistical tests for each.

Identify the implementation and interpretation of tests for comparing two independent samples, like the Wilcoxon rank sum test.

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Definitions:

Balding Patches

Areas on the scalp where hair has thinned or fallen out, leading to noticeable spots of hair loss.

Contact Lenses

Thin optical lenses placed directly on the surface of the eyes, used to correct various vision disorders or for cosmetic reasons.

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A specialized department in hospitals that provides immediate care for acute illnesses and injuries.

Motor Vehicle Accident

An incident involving a collision or crash of a vehicle with another vehicle, pedestrian, animal, road debris, or other stationary obstruction.