Each of the four independent situations below describes a finance lease in which annual lease payments are payable at the beginning of each year. The lessee is aware of the lessor's implicit rate of return. 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) Lease term (years) Lessor's rate of return Fair value of lease asset Lessor's cost of lease asset Residual value: Estimated fair value Guaranteed fair value 1 6 10% $ 58,000 $ 58,000 0 0 2 Situation 9 11% $ 358,000 $ 358,000 $ 58,000 0 3 7 9% $ 83,000 $ 53,000 $ 15,000 $ 15,000 4 10 12% $ 473,000 $ 473,000 $30,000 $ 35,000
Each of the four independent situations below describes a finance lease in which annual lease payments are payable at the beginning of each year. The lessee is aware of the lessor's implicit rate of return. 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) Lease term (years) Lessor's rate of return Fair value of lease asset Lessor's cost of lease asset Residual value: Estimated fair value Guaranteed fair value 1 6 10% $ 58,000 $ 58,000 0 0 2 Situation 9 11% $ 358,000 $ 358,000 $ 58,000 0 3 7 9% $ 83,000 $ 53,000 $ 15,000 $ 15,000 4 10 12% $ 473,000 $ 473,000 $30,000 $ 35,000
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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