The Blue Goose Is Trying to Decide Whether to Lease

question 39

Multiple Choice

The Blue Goose is trying to decide whether to lease or buy some new refrigeration equipment for the restaurant.The equipment costs $63,000,has a 7-year life and will be worthless after the 7 years.The cost of borrowed funds is 8.4 percent and the tax rate is 32 percent.The equipment can be leased for $9,800 a year.What is the amount of the annual depreciation tax shield if the firm uses straight-line depreciation?

• A)$2,880
• B)$4,300
• C)$7,500
• D)$8,333
• E)$9,000

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Definitions:

Circle Invalid Data

A feature in data analysis and spreadsheet applications that visually marks data points that do not meet predefined validation criteria.

COUNTIF Function

An Excel function that counts the number of cells in a range that meet a single criterion; for example, counting the number of times a particular city appears in a list of cities.

Blank Cells

Empty spaces without data in a spreadsheet or table, often awaiting input or indicating the absence of applicable information.

SUMIF Function

A function in spreadsheet software that calculates the sum of a range of cells that meet a specified criterion.