Uptown Stores Is Contemplating the Acquisition of Some New Equipment

question 77

Multiple Choice

Uptown Stores is contemplating the acquisition of some new equipment. The purchase price is $52,000. The equipment would be depreciated using MACRS depreciation which allows for 33.33
Percent, 44.44 percent, 14.82 percent, and 7.41 percent depreciation over years 1 to 4, respectively.
The equipment would be worthless after that time. The equipment can be leased for $14,000 a year
For 4 years. The firm can borrow money at 9 percent and has a 35 percent tax rate. What is the
Incremental annual cash flow for year 3 if the company decides to lease the equipment rather than
Purchase it?

• A) -$13,417
• B) -$11,797
• C) -$9,840
• D) -$7,597
• E) -$6,528

---

Definitions:

Aggressive Behaviors

Aggressive behaviors are actions intended to harm or intimidate others, often stemming from frustration, anger, or as a means of defense.

Facial Expressions

The movements of the facial muscles that convey emotions and communicate socially.

Voluntary Smiles

Smiles that are consciously produced by an individual, typically to convey happiness or sociability.

Spontaneous Smiles

Smiles that occur without external stimuli, often reflecting a feeling of contentment or an innate reaction.