Union Cape: the lease contract specifies that the machine becomes the property of the lessee at the end of the lease, and the salvage value is R30 000 under both options. Why does the memo ignore the salvage value in comparing the alternatives?

Question

Accepted Answer

Because it occurs under both alternatives and therefore does not affect the difference between them

Answer

Because it is a sunk cost

Answer

Because salvage values are always zero

Answer

Because salvage value is not taxable

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Union Cape: the lease contract specifies that the machine becomes the property o...

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