Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

PLEASE ANSWER ASAP Question 18 (3.5 points) ABC Co wants to purchase a equipment worth $24,000. It will be worthless in three years. ABC Co

image text in transcribed

image text in transcribed

PLEASE ANSWER ASAP

Question 18 (3.5 points) ABC Co wants to purchase a equipment worth $24,000. It will be worthless in three years. ABC Co can borrow the money at 10 percent to purchase the asset or lease the asset where yearly payments will be $9,500 per year, payable at the end of each year. The machine belongs to a CCA rate of 30 percent. The tax rate is 40 percent. The asset pool will be closed after the three years. All lease payments and tax payments occur at the end of the year. The NAL for ABC Co. is: $740.68 $1,152.44 $1,362.23 $1,232.63 $430.72 Question 17 (3.5 points) ABC Co follows a flexible short-term financing policy. The firm produces winter boots, which is a cyclical business. When the firm needs to pay for large inventories in advance of peak sales, the firm will: Sell one of the non-current assets. Negotiate a short-term bank loan. Sell marketable securities. Borrow from a family member. Issue commercial paper with a maturity of 270 days or less. Question 18 (3.5 points) ABC Co wants to purchase a equipment worth $24,000. It will be worthless in three years. ABC Co can borrow the money at 10 percent to purchase the asset or lease the asset where yearly payments will be $9,500 per year, payable at the end of each year. The machine belongs to a CCA rate of 30 percent. The tax rate is 40 percent. The asset pool will be closed after the three years. All lease payments and tax payments occur at the end of the year. The NAL for ABC Co. is: $740.68 $1,152.44 $1,362.23 $1,232.63 $430.72 Question 17 (3.5 points) ABC Co follows a flexible short-term financing policy. The firm produces winter boots, which is a cyclical business. When the firm needs to pay for large inventories in advance of peak sales, the firm will: Sell one of the non-current assets. Negotiate a short-term bank loan. Sell marketable securities. Borrow from a family member. Issue commercial paper with a maturity of 270 days or less

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Finance questions