Steven's Auto Detailers Is Trying to Decide Whether to Lease

question 58

Multiple Choice

Steven's Auto Detailers is trying to decide whether to lease or buy some new equipment for polishing vehicles.The equipment costs $22,000,has a 3-year life,and will be worthless after the 3 years.The aftertax discount rate is 6.2 percent.The annual depreciation tax shield is $1,760 and the aftertax annual lease payment is $6,800.What is the net advantage to leasing?

• A)-$796.58
• B)-$397.11
• C)$184.92
• D)$315.40
• E)$462.84

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Definitions:

External Environment

Factors outside an organization that can affect its performance, including economic, political, social, and technological aspects.

Moral Principles

Fundamental beliefs regarding what is right and wrong that serve as a foundation for ethical behavior and decision-making.

Universal Values

Fundamental principles or standards of behavior that are widely accepted and upheld across different cultures and societies.

Human Dignity

A fundamental concept that suggests that all humans possess inherent worth and deserve respect and ethical treatment.