Your fiRm Is Considering Either Leasing or Buying Some New

question 143

Multiple Choice

Your firm is considering either leasing or buying some new equipment. The lease payments will be $5,600 a year. The purchase price is $17,900. The equipment has a 4-year life after which time it is
Expected to have a resale value of $1,500. The equipment belongs in a 30 percent CCA class. Your
firm borrows money at 8.6 percent, and has a 35 percent tax rate. What is the incremental cash flow
For year 1 if the company decides to lease the equipment rather than purchase it?

• A) -$5,515
• B) -$5,247
• C) -$4,828
• D) -$4,580
• E) -$4,109

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Definitions:

Lymphocyte

A type of white blood cell that plays a significant role in the immune response by recognizing and fighting infection and disease.

White Blood Cell

Cells of the immune system involved in defending the body against both infectious disease and foreign materials.

Differential White Blood Cell Count

A test that measures the percentages of different types of white blood cells in the blood, used to diagnose and monitor diseases.

Lymphocytes

A type of white blood cell integral to the immune system, with roles in adaptive immunity, including B cells and T cells.