Kohers Inc

question 24

Multiple Choice

Kohers Inc. is considering a leasing arrangement to finance some manufacturing tools that it needs for the next three years. The tools will be obsolete and worthless after 3 years. The firm will depreciate the cost of the tools on a straight-line basis over their 3-year life. It can borrow $4,800,000, the purchase price, at 10% and buy the tools, or it can make 3 equal end-of-year lease payments of $2,100,000 each and lease them. The loan obtained from the bank is a 3-year simple interest loan, with interest paid at the end of the year. The firm's tax rate is 40%. Annual maintenance costs associated with ownership are estimated at $240,000, but this cost would be borne by the lessor if it leases. What is the net advantage to leasing (NAL) , in thousands? (Suggestion: Delete 3 zeros from dollars and work in thousands.)

• A) $96
• B) $106
• C) $112
• D) $117

Understand cognitive, socioemotional, and biological processes of development.

Differentiate between the concepts of gender and sex.

Recognize the importance of socioemotional development and its impact on children.

Understand the role of social policy in promoting child welfare.

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Definitions:

Evaluating Options

The process of considering various possibilities or choices to make informed decisions.

Alternative Solutions

Different methods or strategies to solve a problem or achieve an objective.

Recommendation Report

A document prepared to propose solutions and suggest actions based on analyzed data and information tailored to a specific audience or purpose.

Informational Reports

Documents compiled to inform readers about a specific topic, presenting facts without requiring further action.