Teal Mountain Inc. wishes to lease machinery to Thiensville Company. Thiensville wants the machinery for 4 years, although it has a useful life of 10 years. The machinery has a fair value at the commencement of the lease of $38,000, and Teal Mountain expects the machinery to have a residual value at the end of the lease term of $27,000. However, Thiensville does not guarantee any part of the residual value. Thiensville does expect that the residual value will be $36,000 instead of $27,000. What would be the amount of the annual rental payments Teal Mountain demands of Thiensville, assuming each payment will be made at the end of each year and Teal Mountain wishes to earn a rate of return on the lease of 5%? (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answer to 0 decimal places, e.g. 5,275.) Click here to view factor tables. Amount of equal annual lease payments 24

Teal Mountain Inc. wishes to lease machinery to Thiensville Company. Thiensville wants the machinery for 4 years, although it has a useful life of 10 years. The machinery has a fair value at the commencement of the lease of $38,000, and Teal Mountain expects the machinery to have a residual value at the end of the lease term of $27,000. However, Thiensville does not guarantee any part of the residual value. Thiensville does expect that the residual value will be $36,000 instead of $27,000. What would be the amount of the annual rental payments Teal Mountain demands of Thiensville, assuming each payment will be made at the end of each year and Teal Mountain wishes to earn a rate of return on the lease of 5%? (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answer to 0 decimal places, e.g. 5,275.) Click here to view factor tables. Amount of equal annual lease payments 24

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Shamrock Inc. wishes to lease machinery to Thiensville Company. Thiensville wants the machinery for 4 years, although it has a useful life of 10 years. The machinery has a fair value at the commencement of the lease of $40,000, and Shamrock expects the machinery to have a residual value at the end of the lease term of $28,000. However, Thiensville does not guarantee any part of the residual value. Thiensville does expect that the residual value will be $38,000 instead of $28,000.What would be the amount of the annual rental payments Shamrock demands of Thiensville, assuming each payment will be made at the end of each year and Shamrock wishes to earn a rate of return on the lease of 7%? (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answer to 0 decimal places, e.g. 5,275.)Click here to view factor tables. Amount of equal annual lease payments = $? factor table below:
Mequon Inc. wishes to lease machinery to Thiensville Company. Thiensville wants the machinery for 4 years, although it has a useful life of 10 years. The machinery has a fair value at the commencement of the lease of $47,000, and Mequon expects the machinery to have a residual value at the end of the lease term of $30,000. However, Thiensville does not guarantee any part of the residual value. Thiensville does expect that the residual value will be $45,000 instead of $30,000. What would be the amount of the annual rental payments Mequon demands of Thiensville, assuming each payment will be made at the end of each year and Mequon wishes to earn a rate of return on the lease of 6%?
Kingbird Inc. wishes to lease machinery to Thiensville Company. Thiensville wants the machinery for 4 years, although it has a useful life of 10 years. The machinery has a fair value at the commencement of the lease of $45,000, and Kingbird expects the machinery to have a residual value at the end of the lease term of $28,000. However, Thiensville does not guarantee any part of the residual value. Thiensville does expect that the residual value will be $43,000 instead of $28,000.What would be the amount of the annual rental payments Kingbird demands of Thiensville, assuming each payment will be made at the end of each year and Kingbird wishes to earn a rate of return on the lease of 5%? (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answer to 0 decimal places, e.g. 5,275.)Click here to view factor tables. Amount of equal annual lease payments $
Windsor Inc. wishes to lease machinery to Thiensville Company. Thiensville wants the machinery for 4 years, although it has a useful life of 10 years. The machinery has a fair value at the commencement of the lease of $50,000, and Windsor expects the machinery to have a residual value at the end of the lease term of $26,000. However, Thiensville does not guarantee any part of the residual value. Thiensville does expect that the residual value will be $48,000 instead of $26,000.What would be the amount of the annual rental payments Windsor demands of Thiensville, assuming each payment will be made at the end of each year and Windsor wishes to earn a rate of return on the lease of 7%? (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answer to 0 decimal places, e.g. 5,275.)Click here to view factor tables. Amount of equal annual lease payments $enter the Amount of equal annual lease payments in dollars
Teal Mountain Inc. wishes to lease machinery to Sandhill Company. Sandhill wants the machinery for 4 years, although it has a useful life of 10 years. The machinery has a fair value at the commencement of the lease of $40,000, and Teal Mountain expects the machinery to have a residual value at the end of the lease term of $28,000. However, Sandhill does not guarantee any part of the residual value. Sandhill does expect that the residual value will be $38,000 instead of $28,000. What would be the amount of the annual rental payments Teal Mountain demands of Sandhill, assuming each payment will be made at the end of each year and Teal Mountain wishes to earn a rate of return on the lease of 6% ? (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answer to O decimal places, e.g. 5,275.) Click here to view factor tables. Amount of equal annual lease payments $ 4,784
Teal Mountain Inc. wishes to lease machinery to Sandhill Company. Sandhill wants the machinery for 4 years, although it has a useful life of 10 years. The machinery has a fair value at the commencement of the lease of $40,000, and Teal Mountain expects the machinery to have a residual value at the end of the lease term of $28,000. However, Sandhill does not guarantee any part of the residual value. Sandhill does expect that the residual value will be $38,000 instead of $28,000. What would be the amount of the annual rental payments Teal Mountain demands of Sandhill, assuming each payment will be made at the end of each year and Teal Mountain wishes to earn a rate of return on the lease of 6%? (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answer to 0 decimal places, e.g. 5,275.) Amount of equal annual lease payments: $
Splish Brothers Inc. wishes to lease machinery to Thiensville Company. Thiensville wants the machinery for 4 years, although it has a useful life of 10 years. The machinery has a fair value at the commencement of the lease of $56,000, and Splish Brothers expects the machinery to have a residual value at the end of the lease term of $26,000. However, Thiensville does not guarantee any part of the residual value. Thiensville does expect that the residual value will be $54,000 instead of $26,000. What would be the amount of the annual rental payments Splish Brothers demands of Thiensville, assuming each payment will be made at the end of each year and Splish Brothers wishes to earn a rate of return on the lease of 6%? (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answer to O decimal places, e.g. 5,275.) https://education.wiley.com/content/Kieso_Intermediate_Accounting_17e/media/simulations/interest_rate_tables.pdf
Splish Brothers Inc. wishes to lease machinery to Sunland Company. Sunland wants the machinery for 4 years, although it has a useful life of 10 years. The machinery has a fair value at the commencement of the lease of $56,000, and Splish Brothers expects the machinery to have a residual value at the end of the lease term of $26,000. However, Sunland does not guarantee any part of the residual value. Sunland does expect that the residual value will be $54,000 instead of $26.000. What would be the amount of the annual rental payments Splish Brothers demands of Sunland, assuming each payment will be made at the end of each year and Splish Brothers wishes to earn a rate of return on the lease of 6%? (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answer to O decimal places, e.g. 5,275.) Click here to view factor tables. Amount of equal annual lease payments $
Teal Mountain Company is negotiating to lease a piece of equipment to MTBA, Inc. MTBA requests that the lease be for 9 years. The equipment has a useful life of 10 years. Teal Mountain wants a guarantee that the residual value of the equipment at the end of the lease is at least $4,000. MTBA agrees to guarantee a residual value of this amount though it expects the residual value of the equipment to be only $2,500 at the end of the lease term.If the fair value of the equipment at lease commencement is $60,000, what would be the amount of the annual rental payments Teal Mountain demands of MTBA, assuming each payment will be made at the beginning of each year and Teal Mountain wishes to earn a rate of return on the lease of 6%? (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answer to 0 decimal places, e.g. 5,275.)
Grygiel Company leases a nonspecialized machine with a fair value of $50,000 to Baker Company. The lease has a life of 6 years and requires a $10,000 payment at the end of each year. The lease does not include a transfer of ownership nor a bargain purchase option, and the life of the lease is less than a major part of the expected economic life of the machine. It is probable that Grygiel will collect the lease payments plus any amount necessary to satisfy a residual value guarantee. Round your answers to the nearest dollar. (Click here to access the PV and FV tables to use with this problem.) Required: 1. If the interest rate implicit in the lease is 10%, compute the machine’s expected residual value.
Grygiel Company leases a nonspecialized machine with a fair value of $40,000 to Baker Company. The lease has a life of 6 years and requires a $6,000 payment at the end of each year. The lease does not include a transfer of ownership nor a bargain purchase option, and the life of the lease is less than a major part of the expected economic life of the machine. It is probable that Grygiel will collect the lease payments plus any amount necessary to satisfy a residual value guarantee. Round intermediate and final answers to the nearest dollar. (Click here to access the PV and FV tables to use with this problem.) Required: 1. If the interest rate implicit in the lease is 10%, compute the machine’s expected residual value.$fill in the blank 1
Larkspur Company is negotiating to lease a piece of equipment to MTBA, Inc. MTBA requests that the lease be for 9 years. The equipment has a useful life of 10 years. Larkspur wants a guarantee that the residual value of the equipment at the end of the lease is at least $7,000. MTBA agrees to guarantee a residual value of this amount though it expects the residual value of the equipment to be only $2,000 at the end of the lease term.If the fair value of the equipment at lease commencement is $115,000, what would be the amount of the annual rental payments Larkspur demands of MTBA, assuming each payment will be made at the beginning of each year and Larkspur wishes to earn a rate of return on the lease of 11%? (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answer to 0 decimal places, e.g. 5,275.)Click here to view factor tables. Amount of equal annual lease payments $