Cavalier Copper Mines has $840 million in total liabilities and $520 million in shareholders’ equity. It discloses operating lease commitments over the next fi ve years witha present value of $100 million. If the lease commitments are treated as debt, thedebt-to-total-capital ratio is closest to:A . 0.58.B . 0.62.C . 0.64.
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Cavalier Copper Mines has $840 million in total liabilities and $520 million in shareholders’ equity. It discloses operating lease commitments over the next fi ve years with
a present value of $100 million. If the lease commitments are treated as debt, the
debt-to-total-capital ratio is closest to:
A . 0.58.
B . 0.62.
C . 0.64.
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- Oden Company is in the business of leasing new sophisticated equipment. As lessor, Oden Company expects a 12% return on the net investment.All leases are classified as direct financing. At the end of the lease term, the equipment will revert to Oden Company.On January 1, 2020, an equipment is leased to a lessee with the following information. Cost of equipment to Oden 5,250,000Residual value-unguaranteed 600,000Annual rental payable in advance 900,000Useful life and lease term 8 yearsImplicit interest rate 12 %First lease payment Jan 1, 2020Required:1. Compute the total financial revenue2. Prepare a table amortization for the lease receivable and interest income.The 2013 annual report of the Sonic Corporation reported minimum lease payments receivable of $1,701,000 and a net investment in direct financing leases of $1,531,000. What accounts for the difference between these two amounts? Explain.Zhang Company leased equipment from Mann Industries. The lease agreement qualifies as a finance lease and requires annual lease payments of $49,677 over a five-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 4%. The asset being leased cost Mann $180,000 to produce. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Required: 1. Determine the price at which the lessor is "selling" the asset (present value of the lease payments). 2. What would be the amounts related to the lease that the lessor would report in its income statement for the year ended December 31 (ignore taxes)?. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Determine the price at which the lessor is "selling" the asset (present value of the lease payments). Note: Round your intermediate and final answers to the nearest whole…