Discuss the nature of this lease in relation to the lessor. This is a Compute the amount of each of the following items. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answers to 0 decimal places, e.g. 5,275.) (1) Lease receivable (2) Sales price (3) Cost of sales Click if you would like to Show Work for this question: Open Show Work
Discuss the nature of this lease in relation to the lessor. This is a Compute the amount of each of the following items. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answers to 0 decimal places, e.g. 5,275.) (1) Lease receivable (2) Sales price (3) Cost of sales Click if you would like to Show Work for this question: Open Show Work
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter19: Lease Financing
Section: Chapter Questions
Problem 6MC: The lessee compares the present value of owning the equipment with the present value of leasing it....
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Grouper Company manufactures a check-in kiosk with an estimated economic life of 12 years and leases it to National Airlines for a period of 10 years. The normal selling price of the equipment is $260,015, and its unguaranteed residual value at the end of the lease term is estimated to be $20,500. National will pay annual payments of $37,300 at the beginning of each year. Grouper incurred costs of $195,000 in manufacturing the equipment and $4,100 in sales commissions in closing the lease. Grouper has determined that the collectibility of the lease payments is probable and that the implicit interest rate is 10%.
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