b) A company is thinking of acquiring fixed assets worth TK. 10 million onfinancial lease for five years at an interest rate of 12%. The lease would beamortized over five years by equal annual installments. You are required tocalculate annual installment and show how lease is amortized over five years ifinstallment is paid at year end or at the beginning of the year.

Given information in the question: Value of fixed assets : 10 million Interest rate : 12% Time…

Answered: b) A company is thinking of acquiring…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Similar questions

Assume for a particular capital lease the unpaid lease obligation at the beginning of the year was OMR 353,000 and a OMR78,000 lease payment is made at the end of each year. If the lease has an implicit interest rate of 10% per annum, the end of year payment would be recorded as your book.
A lease agreement that qualifies as a finance lease calls for annual lease payments of $40,000 over a six-year lease term (also the asset's useful life), with the first payment on January 1, the beginning of the lease. The interest rate is 7% Required: a. Complete the amortization schedule for the first two payments. b. If the lessee's fiscal year is the calendar year, what would be the amount of the lease liability that the lessee would report in its balance sheet at the end of the first year? What would be the interest payable? Note: Use tables, Excel, or a financial calculator. (EV of $1. PV of $1. EVA of $1, PVA of $1. EVAD of $1 and PVAD of $1) Complete this question by entering your answers in the tabs below. Required A Required B Complete the amortization schedule for the first two payments. Note: Enter all amounts as positive values. Round your answers to the nearest whole dollar. Date Lease Payment Effective Interest January 1, Year 1 January 1, Year 1 January 1, Year 2…
A floating rate mortgage loan is made for $185,000 for a 30-year period at an initial rate of 12 percent interest. However, the borrower and lender have negotiated a monthly payment of $1,480. Required: a. What will be the loan balance at the end of year 1? b. If the interest rate increases to 13 percent at the end of year 2, how much is the payment plus negative amortization in year 2 and year 5 if the payment remains at $1,480?
Compute the monthly payments on a 3-year lease for a $29,128 car if the annual rate of depreciation is 19% and the lease's annual interest rate is 3.8%. Round your answer to the nearest dollar. Compute the interest paid on a 2-year lease for a $29,372 car if the annual rate of depreciation is 12% and the lease's annual interest rate is 4.9%. Round your answer to the nearest dollar.
A lease valued at $21,000 requires payments of $1,763 at the beginning of every three months. If money is worth 5% compounded quarterly, what is the size of the final lease payment?
A firm needs some machinery which it can lease from the manufacturer for a five-year period by making lease payments of $8,000 at the end of each month. If the interest rate for the firm is 8% p.a., with monthly compounding, the present value of the lease payments is closest to: O $394,547. $380,289. $383,300. O $470,547.
General finance
If lease payments on an office call for $1,550 per month (paid at the beginning of the month) for 24 months, what is the current value of the lease to the landlord. Assume an annual discount rate of 15 percent. Ans.
An mortgage of $200000 is amortized at 30 years, with an interest rate of 3.5% compounded semi-annually and a term of 4 years. If monthly payments are chosen - what is the amount of the monthly payment? Your Answer:
A contract requires lease payments of $700 at the beginning of every month for 4 years. a. What is the present value of the contract if the lease rate is 4.75% compounded annually? Round to the nearest cent b. What is the present value of the contract if the lease rate is 4.75% compounded monthly? Round to the nearest cent
A contract requires lease payments of $800 at the beginning of every month for 8 years. a. What is the present value of the contract if the lease rate is 5.22% compounded annually? b. What is the present value of the contract if the lease rate is 5.22% compounded daily?
A contract has been signed to lease a building at P21.483 per year with an annual increase of P1,045 for 10 years Payments are to be made at the end of each year, starting one year from now. The prevailing interest rate is 8.78%.What lump sum paid today would be equivalent to the 10-year lease -payment plan?

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