The Auto Mart Is Trying to Decide Whether to Lease

question 90

Multiple Choice

The Auto Mart is trying to decide whether to lease or buy some new equipment. The equipment costs $74,000, has a 3-year life, and will be worthless after the 3 years. The after-tax discount rate
Is 5.5 percent. The annual CCA tax shield is $8,633 and the after-tax annual lease payment is
$16,033. What is the net advantage to leasing?

• A) -$3,509
• B) -$211
• C) $4,414
• D) $7,453
• E) $8,316

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Definitions:

Disk Management

A utility within operating systems that allows users to perform advanced storage tasks like partitioning drives, formatting disks, and managing disk volumes.

New Volume

This term typically refers to the creation of a new storage space or partition on a digital storage device, like a hard drive or SSD.

Partition

A process that can divide a hard drive so that the computer sees more than one drive.

Technician

A professional skilled in the practical application of science and technology in a particular domain, often related to systems maintenance, repairs, and installations.