Your Firm Is Considering Leasing a New Computer

question 16

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 NPV of the lease relative to the purchase?

• A)£-1,039.78
• B)£ 339.78
• C)£ 360.22
• D)£6,610.22
• E)None of the above.

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Comprehend the concept of false imprisonment and its legal implications.

Understand the criteria for lawful detainment by private individuals or shop owners.

Understand the concept of a production function and its relevance to the efficiency of different forms of production.

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Definitions:

Rate of Return

Change in an investment's value within a predetermined interval, indicated as a percent of the investment's initial cost.

Annual Dividend

The total amount of dividend payments made to shareholders over the course of a year, often used as an indicator of a company's financial health.

Rate of Return

The accrual or depletion in value of an investment across a chosen period, quantified as a percentage of the investment’s initial expense.

Constant Dividend

A policy in which a firm aims to pay out a fixed dividend amount to shareholders regularly.