Medarex Is Considering the Lease of an Electronic Welder Costing

question 46

Multiple Choice

Medarex is considering the lease of an electronic welder costing $210,000 from Key Leasing.The period of the lease will be 6 years.The welder will be depreciated under MACRS rules for a 5-year class asset.Medarex's marginal tax rate is 40%.Annual beginning of the year lease payments will be $50,000.Estimated salvage value is zero.If Medarex's after tax cost of borrowing is 15%, compute the net advantage to leasing.(Problem requires MACRS tables.)

• A)$8,527
• B)-$17,592
• C)-$67,174
• D)$21,427

---

Definitions:

Frustrated

Feeling upset or annoyed, often due to inability to change or achieve something, leading to a sense of dissatisfaction and helplessness.

Home-Learning Activity

Educational tasks or projects assigned to students to be completed outside of school hours, often with the aim of reinforcing classroom learning.

Homework

Assignments given to students by their teachers to be completed outside the classroom.

Strategy Learning

A method that focuses on teaching students how to learn more effectively by using specific techniques or strategies to improve their understanding and retention of material.