Cross Town Express Is Contemplating the Acquisition of Some New

question 15

Multiple Choice

Cross Town Express is contemplating the acquisition of some new equipment.The purchase price is $74,000.The equipment would be depreciated using MACRS depreciation which allows for 33.33 percent,44.44 percent,14.82 percent,and 7.41 percent depreciation over years 1 to 4,respectively.The equipment would be worthless after that time.The equipment can be leased for $19,100 a year for 4 years.The firm can borrow money at 9.5 percent and has a 28 percent tax rate.What is the incremental annual cash flow for year 3 if the company decides to lease the equipment rather than purchase it?

• A)-$16,823
• B)-$15,797
• C)$14,312
• D)$15,797
• E)$16,823

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Definitions:

Patriarchal Nature

Describes a social system in which men hold primary power and predominate in roles of political leadership, moral authority, and control of property.

Symbolic Interactionism

A sociological perspective focusing on the ways in which individuals interact with one another and derive meaning from these interactions through the use of symbols.

Common Values

Fundamental beliefs or standards shared among members of a community or society that guide behavior and social interaction.

Cultural Diversity

Cultural diversity is the existence of a variety of cultural or ethnic groups within a society, valuing the differences in traditions, history, and expressions among groups.