Your Firm Is Considering Either Leasing or Buying Some New

question 38

Multiple Choice

Your firm is considering either leasing or buying some new equipment.The lessor will charge $13,800 a year for 4 years should you decide to lease.The purchase price is $47,800.The equipment has a 4-year life after which it is expected to have a resale value of $8,400.Your firm uses straight-line depreciation,borrows money at 10 percent,and has a 33 percent tax rate.What is the aftertax salvage value of the equipment?

• A)$5,544
• B)$5,628
• C)$5,709
• D)$5,748
• E)$5,820

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Definitions:

Workforce

The group of people who are available for work, either in a specific region or in the overall economy.

Permanent Settlements

Communities where people establish long-term residences in one place, creating a stable living environment and allowing for the development of complex societies.

Horticultural Society

A society primarily involved in growing crops using hand tools, often characterized by small, sustainable communities.

Industrial Era

A period of history characterized by significant technological advancements and the growth of manufacturing and industry, typically considered to have begun in the late 18th century.