On January 1,2014,O'neil,Inc

question 34

Multiple Choice

On January 1,2014,O'neil,Inc.signed a noncancelable lease for a silver polishing machine.The machine has an estimated useful life of nine years.The term of the lease is a six-year term with title passing to O'neil at the end of the lease.The agreement called for annual payments of $40,000 starting at the end of the first year.Assume aggregate lease payments were determined to have a present value of $200,000,based on implicit interest of 12 percent.What amount of interest expense should O'neil report in its 2014 income statement from this lease transaction?

• A) $0
• B) $16,000
• C) $24,000
• D) $33,333

Distinguish between financial and managerial accounting.

Evaluate how to improve production capacities and efficiencies in manufacturing.

Identify differences between financial and managerial accounting in terms of orientation and requirements.

Understand the lean business model and its components.

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Definitions:

Opportunity Costs

The penalty of overlooking the next most advantageous option when a choice is made.

Efficient

Achieving maximum productivity with minimum wasted effort or expense.

Production Possibility Frontier

A graphical representation showing the maximum combination of goods and services that can be produced using all available resources efficiently.

Full Employment

A situation where all available labor resources are being used in the most economically efficient way.