What Is the Accounting Capitalized Value of an Operating Lease

question 51

Multiple Choice

What is the accounting capitalized value of an operating lease that involves payments of $8,000 per year (at the end of each year) for 12 years with no possibility of purchase at the end of the lease term.Assume that the firm is in the 35% marginal tax rate and the pre-tax cost of debt for the firm is 12%?

• A) $96,000.00
• B) $49,554.99
• C) $39,596.96
• D) $32,210.75

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Definitions:

Human Mind

The totality of conscious and unconscious mental processes and activities in a human being.

General Purpose

pertains to tools, machines, or software designed to perform a variety of functions rather than being specialized for one specific task.

Reinforcement

In behavioral psychology, a consequence applied that will strengthen an organism's future behavior whenever that behavior is preceded by a specific antecedent stimulus.

Skinner

B.F. Skinner, an American psychologist and behaviorist known for his work in developing the theory of operant conditioning, which involves learning through rewards and punishments.