Your Firm Is Considering Leasing a New Computer

question 10

Multiple Choice

Your firm is considering leasing a new computer.The lease lasts for 9 years.The lease calls for 10 payments of £1,000 per year with the first payment occurring immediately.The computer would cost £7,650 to buy and would be straight-line depreciated to a zero salvage over 9 years.The actual salvage value is negligible because of technological obsolescence.The firm can borrow at a rate of 8%.The corporate tax rate is 30%. What is the after-tax cash flow from leasing relative to the after-tax cash flow from purchasing in years 1-9?

• A)£-255
• B)£-955
• C)£-1,295
• D)£-1,850
• E)None of the above.

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Definitions:

Interactional Sociological Theories

Theories that focus on how individuals interact with each other in society, placing importance on the dynamics of social relationships.

Institutional Sociological Theories

Sociological theories that explore the systematic and patterned ways in which social institutions operate and affect society.

Sexual Difference Theories

Theories focused on exploring and explaining the distinctions between male and female identities, roles, and relationships in society.

Institutional Sociological Theories

Theories that explore how institutions (like family, education, and government) shape societal norms, values, and practices.