1. A 5-year lease has annual payments of $115,000. The leased asset would cost $500,000 to buy, would be depreciated straight-line to a zero salvage value over 5 years, and has an actual salvage value of zero. The firm can borrow at 8 percent on a pretax basis and has a tax rate of 34 percent. What is the net advantage of leasing?
A. -1160.90 B. -30690 C. 61201.17 D. 27850.89 E. -29504.10
2. I bought 3000 shares of Snap Inc. stock. I am heading to Hawaii and want to insure myself against losing money if the stock should decrease while I am gone. To do this, I should place a __________.
limit-buy order
limit-sell order
stop-buy order
stop-loss order