Suppose That SmallCity,USA,is Considering Hiring an Additional Police Officer

question 86

Multiple Choice

Suppose that SmallCity,USA,is considering hiring an additional police officer.The reduction in crime is estimated to be worth $20 for each of SmallCity's 3,000 residents.What should the city do?

• A)Hire the police officer because additional safety is priceless.
• B)Hire the police officer if the cost of the new officer is less than $60,000.
• C)Do not hire the police officer because the costs exceed the benefits.
• D)Hire the police officer only if the benefit to the residents exceeds $3,000.

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Definitions:

Sales-type Lease

A leasing arrangement in which the lessor recognizes immediate profit on the leased asset, often used in scenarios where the lessor is also the manufacturer or dealer of the equipment.

Lease Receivable

Represents the payments that a lessor is entitled to receive based on the terms of a lease agreement.

Interest Revenue

Income earned by an entity from lending money or investing in interest-bearing financial instruments.

Unearned Interest

Interest that has been collected on a loan by a lender but not yet earned because the loan principal has not been fully disbursed.