Use the Table for the Question(s)below

question 79

Multiple Choice

Use the table for the question(s) below.
Your firm is a lessor that is planning to buy some new equipment and offer it to another firm through a lease arrangement.You have calculated the above cash flows for a potential lease you might offer.
-If your firm's borrowing cost is 12% and the tax rate is 45%,what is the NPV of buying and leasing?

• A)$5,422
• B)$14,694
• C)-$14,694
• D)$15,069
• E)$1,960

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Definitions:

Minimum Quantities

The smallest amount of a product that can be ordered, produced, or maintained in inventory.

Maximized Total Cost

Refers to the highest possible sum of all costs associated with a certain process, project, or production activity.

Raw Materials

The basic, unprocessed resources or inputs used in the production of goods and services.

Labour

The human workforce involved in productive work, especially physical work, in an economy or for a specific project or company.