Coney Island enters into a lease agreement for a new ride. The lease payments have a present value of $2.7 million. Prior to this agreement, the company's total assets are $27.1 million and its total liabilities are $15.7 million. Required: 1. Calculate total stockholders' equity prior to the lease agreement. 2. & 3. Calculate the debt to equity ratio, prior to the lease being signed and immediately after the lease being signed. 4. Does the direction of the change in the debt to equity ratio typically indicate that the company has higher leverage risk? Complete this question by entering your answers in the tabs below. Req 1 Req 2 and 3 Req 4 Calculate total stockholders' equity prior to the lease agreement. (Enter your answer in millions not in dollars (i.e., $5,500,000 should be entered as 5.5). Round your answer to 1 decimal place.) Stockholders' equity million D

Coney Island enters into a lease agreement for a new ride. The lease payments have a present value of $2.7 million. Prior to this agreement, the company's total assets are $27.1 million and its total liabilities are $15.7 million. Required: 1. Calculate total stockholders' equity prior to the lease agreement. 2. & 3. Calculate the debt to equity ratio, prior to the lease being signed and immediately after the lease being signed. 4. Does the direction of the change in the debt to equity ratio typically indicate that the company has higher leverage risk? Complete this question by entering your answers in the tabs below. Req 1 Req 2 and 3 Req 4 Calculate total stockholders' equity prior to the lease agreement. (Enter your answer in millions not in dollars (i.e., $5,500,000 should be entered as 5.5). Round your answer to 1 decimal place.) Stockholders' equity million D

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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Ericson Company leased an asset to another entity. The o COst The lease provided for a transfer of title to the lessee at the of the asset was P7,994,000. Terms of the lease specify and four year-end rental payments. The lease qualified as a four-year life for the lease, an annual interest rate of 15%, direct financing lease... The lease provided for a transfer of title to the lessee end of the lease term. After the fourth year, the residual value was estimated P1,000,000. at The PV of 1 at 15% for 4 periods is .572, and the PV of a. ordinary annuity of 1 at 15% for 4 periods is 2.855. What is the annual rental payment? a. 2,000,000 b. 3,000,350 c. 2,800,000 d. 2,599,650