Cayman Productions Is Considering Either Leasing or Buying Some New

question 40

Multiple Choice

Cayman Productions is considering either leasing or buying some new underwater photographic equipment.The lessor will charge $26,900 a year for a 2-year lease.The purchase price is $48,600.The equipment has a 2-year life after which time it will be worthless.Cayman uses straight-line depreciation,borrows money at 8 percent,and has sufficient tax loss carryovers to offset any taxes which otherwise might be owed for the next 4 years.What is the net advantage to leasing?

• A)-$1,315
• B)-$1,298
• C)$630
• D)$1,343
• E)$1,457

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Confidence

A feeling of self-assurance arising from an appreciation of one's own abilities or qualities.

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The ability of an individual or organization to perform a task effectively, with the required skills and knowledge.

Goal-Setting Theory

A psychological theory that suggests specific and challenging goals along with appropriate feedback contribute to higher and better task performance.

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