Which of the Following Discount Rates Should Be Used for the Lease

question 22

Multiple Choice

Which of the following discount rates should be used for the lease versus borrow decision?

• A)The risk-free rate of interest.
• B)The company's cost of borrowing.
• C)The company's after-tax cost of borrowing.
• D)The company's weighted average cost of capital.

---

Definitions:

Activity Theory

A theory that suggests aging individuals will find their lives satisfying to the extent that they can maintain active engagements and roles in society.

Social Attitudes

A learned tendency to evaluate societal entities with some degree of favor or disfavor.

Property Taxes

Taxes levied on property owners by local governments, based on the assessed value of their property.

Financial Resources

Funds available to a person or organization for spending in the form of cash, liquid securities, and credit lines.