Red Sun Rising Corporation has just signed a lease for its new manufacturing facility. The lease agreement calls for annual payments of $1,850,000 for 20 years with the first payment due today. If the interest rate is 3.55 percent, what is the value of this liability today?

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 3P
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Red Sun Rising Corporation has just signed a lease for its new manufacturing facility. The lease
agreement calls for annual payments of $1,850,000 for 20 years with the first payment due today.
If the interest rate is 3.55 percent, what is the value of this liability today?
Transcribed Image Text:Red Sun Rising Corporation has just signed a lease for its new manufacturing facility. The lease agreement calls for annual payments of $1,850,000 for 20 years with the first payment due today. If the interest rate is 3.55 percent, what is the value of this liability today?
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