Use the Table for the Question(s)below

question 41

Multiple Choice

Use the table for the question(s) below.
Your firm is a lessor that is planning to buy some new equipment and offer it to another firm through a lease arrangement.You have calculated the above cash flows for a potential lease you might offer.
-If your firm's borrowing cost is 3% and the tax rate is 45%,what is the NPV of buying and leasing?

• A)$5,422
• B)$14,694
• C)$11,620
• D)$15,069
• E)$20,479

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Definitions:

Statement of Financial Position

A financial report that provides a snapshot of a company's assets, liabilities, and equity at a specific point in time.

Noncash Expense

Expenses that do not involve actual cash flow, such as depreciation or amortization.

Statement of Comprehensive Income

A financial statement that displays all changes in equity of a company that arise from non-owner sources during a specific period, including all revenues and expenses.

Terminal Loss

The difference between UCC and the adjusted cost of disposal when the UCC is greater.