If a Firm Does Not Expect to Owe Taxes for a Few

question 65

Multiple Choice

If a firm does not expect to owe taxes for a few years and needs some equipment,the firm should:

• A)lease the equipment and retain the tax benefits.
• B)lease the equipment with the lessor retaining the tax ownership of the asset.
• C)borrow the money to buy the asset and then depreciate it using MACRS depreciation.
• D)buy the equipment with cash and depreciate it using MACRS.
• E)buy the equipment and depreciate it straight-line over the life of the asset.