If the Lease Payments of the $800,000 Asset Were $210,000

question 28

Multiple Choice

If the lease payments of the $800,000 asset were $210,000, first payment occurring at the beginning of the first year when the lease is signed, how would the lessee treat these payments in his financial lease analysis? His tax rate is 40%.

• A)lessee would treat each $210,000 payment as a cash outflow.
• B)lessee would deduct these $210,000 payments from his CCA.
• C)lessee would record net cash outflows for five years of $126,000 for leasing.
• D)lessee would amortize the $800,000 over five years and show these inflows.

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Definitions:

Nucleases

Enzymes that cut DNA or RNA at specific sequences, playing critical roles in genetic material replication, repair, and degradation.

DNA Replication

The method through which a double-helix DNA molecule replicates to create two identical copies of the DNA.

Conservative

In a political context, it refers to ideologies favoring tradition, stability, and resistance to change; in a scientific context, it might refer to processes or theories that conserve certain quantities or principles.

Parallel

In biology, this might refer to the occurrence or development of similar traits or structures in organisms not closely related, often due to similar environmental pressures.