Use the Table for the Question(s)below

question 10

Multiple Choice

Use the table for the question(s) below.
Your firm is contemplating leasing some new equipment.The cash flows of either buying or leasing the equipment are shown in the table above.
-If your firm's borrowing cost is 7% and the tax rate is 35%,what is the NPV of leasing versus borrowing?

• A)$178,937
• B)$169,070
• C)$30,930
• D)$21,063
• E)-$14,145

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Definitions:

Electricity

A form of energy resulting from the existence of charged particles, commonly used for power and lighting.

Quantity Demanded

represents the total amount of a product or service consumers are willing and able to purchase at a given price level, within a specific time period.

Price Inelastic

Describes a situation where the demand for a good or service does not significantly change with a change in its price.

Trail Bikes

are specifically designed bicycles for off-road cycling, built to handle rugged trails and terrain.