Which One of the Following Is Probably the Best Reason

question 36

Multiple Choice

Which one of the following is probably the best reason for leasing instead of buying?

• A)Increased ROA
• B)Circumvented expenditure controls
• C)One hundred percent financing
• D)Tax reduction
• E)Increased uncertainty

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Definitions:

Shutdown Point

The level of production and price where a company's revenue just covers its variable costs, below which it would be more economical for the firm to cease operations.

Average Variable Cost

The total variable costs of production divided by the quantity of output produced, representing the variable cost per unit of output.

Normal Rates

The standard or average prices, fees, or charges for goods, services, or financial transactions within a specific sector or economy.

Total Costs

The sum of all expenses incurred in the production of goods or services, including fixed and variable costs.