Tow Ltd Plans to Expand Its Fleet of Train Engines

question 21

Multiple Choice

Tow Ltd plans to expand its fleet of train engines.It is considering the following alternatives:
• Purchase
• Lease
Further information is as follows:
Calculate the NPV of a lease versus purchasing decision.Assume that the tax treatment associated with disposal is riskier than the lease cash flows.

• A)$77 394
• B)$59 288
• C)$75 977
• D)$112 238

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Definitions:

Statistical Test

A procedure used to determine whether the observed data significantly deviates from a hypothesis.

Inferential Statistics

A branch of statistics that infers properties about a population based on a sample of data drawn from that population.

Descriptive Statistics

Values that organize and describe the characteristics of a collection of data, sometimes called a data set.

Nonparametric Statistics

Nonparametric statistics refer to statistical methods used when data do not require a normal distribution, often utilized for analyzing ranked or ordinal data.