M & G TV and Appliance Store Is a Small

question 16

Multiple Choice

M & G TV and Appliance Store is a small company that has hired you to perform some management advisory services.The following information pertains to 2017 operations.

What are the estimated total costs if the company expects to sell 3,300 units next year?

• A)$1,458,400
• B)$2,803,700
• C)$2,361,700
• D)$517,900

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Definitions:

Capital Lease

A lease considered a purchase of an asset for accounting purposes, where the lessee acquires all risks and rewards associated with ownership.

Operating Lease

A leasing agreement allowing the use of an asset without ownership, typically involving payments for a shorter period than the asset's useful life.

Debt Ratios

Financial metrics that measure the proportion of a company's debt to its assets or equity, indicating the financial leverage and risk.

CCA Recapture

Capital Cost Allowance Recapture, a tax mechanism in Canada that occurs when the sale price of a depreciable asset exceeds its undepreciated capital cost or book value.