ANB Leasing Is Planning to Lease an Asset Costing $210,000

question 21

Multiple Choice

ANB Leasing is planning to lease an asset costing $210,000.The lease period will be 6 years.At the end of 6 years, the salvage value is estimated to be $30,000.The asset will be depreciated on a straight-line basis of $30,000 per year over the 6-year period.ANB's marginal income tax rate is 40 percent, but its average tax rate is only 31.5%.If ANB Leasing requires a 12 percent after-tax rate of return on the lease, determine the required annual beginning of the year lease payments.

• A)$45,609
• B)$31,592
• C)$52,653
• D)$46,120

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Definitions:

Microsystems

In the context of ecological systems theory, microsystems are the immediate environments in which an individual interacts, such as family and school.

Mesosystem

A concept in Bronfenbrenner’s ecological systems theory, referring to the interconnections between the microsystems in an individual's life, like home, school, and community.

Macrosystem

In ecological systems theory, the largest and most remote set of people and places to a person that still exercises significant influence on them, encompassing cultural values, economic conditions, and societal laws.

Chronosystem

A layer within Bronfenbrenner's ecological theory representing the dimension of time and its influence on a child's development.