Which Is an Example of the Compensation Strategy

question 1

Multiple Choice

Which is an example of the compensation strategy?

• A)63 × 5 = 63 + 63 + 63 + 63 + 63 = 315
• B)27 × 4 = 20 × 4 + 7 × 4 = 80 + 28 = 108
• C)46 × 3 = 46 × 2 (double)+ 46 = 92 + 46 = 138
• D)27 × 4 is about 30 (27 + 3)× 4 = 120; then subtract out the extra 3 × 4,so 120 -12 = 108

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Definitions:

Break-Even Lease Payment

The lease payment at which the net present value of leasing costs equals the net present value of purchasing the asset.

Cost Of Debt

The effective rate that a company pays on its total debt, acting as a measure to understand the financial health and leverage of a company.

CCA Class

Refers to the Canadian tax system's categorization of depreciable property into classes, with each class having its own rate for capital cost allowance purposes.