Contech (Lessee) Wishes to Lease a Printing Press Valued at $60,000

question 44

Multiple Choice

Contech (lessee) wishes to lease a printing press valued at $60,000 from Wrenn Capital (lessor) for a period of 4 years.Wrenn expects to depreciate the asset on a straight-line basis to a salvage value of $0.Actual salvage value is expected to be $8,000 at the end of 4 years.If Wrenn requires a 12 percent after-tax return on the lease, what is the lease payment that Wrenn will require from Contech? Assume a marginal tax rate of 40%.Under the terms of the lease, payments will be made at the beginning of each of the 4 years.

• A)$11,385
• B)$28,463
• C)$18,975
• D)$21,252

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Definitions:

Employee Performance

The extent to which an employee fulfills their job duties and contributes to their organization’s goals.

Internal Attribution

The assumption that a person's actions are due to their personality, character, or effort, rather than external factors.

Fundamental Attribution Error

refers to the tendency for people to over-emphasize personal characteristics and ignore situational factors when judging others' behavior.

Employee's Lateness

The occurrence of an employee arriving after the scheduled start time for work, which can impact productivity and organizational efficiency.