Homework Answers
Ans Asset Cost
A lessor is a person who lease or lets out the property to another person who is also known as lessee. Lessor purchases the asset which is an outflow from him. This asset is given by lessor to lessee for use in consideration of periodic rentals.
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Award: 0 out of 1.00 point Which of the following is a cash outflow from the...
Zoom in on the image and the clarity resolves! The following relate to an operating lease...
Zoom in on the image and the clarity resolves!
The following relate to an operating lease agreement: a. The lease term is 3 years, beginning January 1, 2018 b. The leased asset cost the lessor $750,000 and had a useful life of eight years with no residual value. The lessor uses straight-line depreciation for its depreciable assets. c. Annual lease payments at the beginning of each year were $136,500. d. Incremental costs of negotiating costs of negotiating and consummating the...
Depreciation is an outflow of cash from the use of a plant asset. O measures the...
Depreciation is an outflow of cash from the use of a plant asset. O measures the decline in market value of an asset. O measures physical deterioration of an asset. O is the process of allocating to expense the cost of a plant asset. QUESTION 5 Having different employees order product, bill customers, receive payments, record them and reconcile the bank statement, will diminish internal control. O only be advisable if the employees have more than 5 years of experience....
Which of the following is NOT a good reason for leasing? Reduced uncertainty about the decrease...
Which of the following is NOT a good reason for leasing? Reduced uncertainty about the decrease in the asset's value over time. Leasing provides 100% financing. Tax advantage due to differential tax rates. Transaction costs are higher when a firm buys and sells fixed asset than when it leases the assets. Used as a hedge to reduce obsolescence. An asset has installed cost of $250,000, a life of 5 years, a CCA rate of 30%, and a salvage value of...
4. The lessee's lease analysis Aa Aa Consider the case of Scorecard Corporation: Scorecard Corporation is...
4. The lessee's lease analysis Aa Aa Consider the case of Scorecard Corporation: Scorecard Corporation is considering the purchase of new manufacturing equipment that will cost $25,000 (including shipping and installation). Scorecard can take out a four-year, $25,000 loan to pay for the equipment at an interest rate of 6.00%. The loan and purchase agreements will also contain the following provisions: • The annual maintenance expense for the equipment is expected to be $250. • The equipment has a four-year...
The following relate to an operating lease agreement: a. The lease term is 3 years, beginning...
The following relate to an operating lease agreement: a. The lease term is 3 years, beginning January 1, 2018. b. The leased asset cost the lessor $760,000 and had a useful life of eight years with no residual value. The lessor uses straight-lir depreciation for its depreciable assets. c. Annual lease payments at the beginning of each year were $134,500. d. Incremental costs of negotiating costs of negotiating and consummating the completed lease transaction incurred by the lessor were $4,950....
Which of the following is true? A) The lessee cannot purchase the asset at its fair...
Which of the following is true? A) The lessee cannot purchase the asset at its fair market value at the end of the lease. B) A financial lease contract allows for relatively high lease payments in earlier periods and then transfers ownership of the asset to the lessee at the end of the lease at less than the asset's fair market value. C) In a leveraged lease, lenders make a non-recourse loan to the lessor. D) The lessor can deduct...
Which of the following statements is true? Income tax is a cash inflow Tax depreciation is...
Which of the following statements is true? Income tax is a cash inflow Tax depreciation is a cash outflow All sales translate into immediate cash inflows Residual value of an asset is an inflow for a project
Which of the following statements is FALSE? In a leveraged lease, the lessor borrows from...
Which of the following statements is FALSE? In a leveraged lease, the lessor borrows from a bank or other lender to obtain the initial capital for the purchase, using the lease payments to pay interest and principal on the loan. In some circumstances, the lessor is not an independent company but rather a separate business partnership, called a special-purpose entity (SPE), which is created by the lessor for the sole purpose of obtaining the lease. In a...
Which one of the following represents a cash outflow from a corporation? Multiple Choice Ο Payment...
Which one of the following represents a cash outflow from a corporation? Multiple Choice Ο Payment of dividends Ο Initial sale of common stock Ο New loan proceeds Ο Issuance of new securities Ο Receipt of tax refund
13 Each of the four independent situations below describes a finance lease in which annual lease...
13 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. (EV of $1. PV of $1. EVA of $1. PVA of $1. EVAD of $1 and PVAD o $1) (Use appropriate factor(s) from the tables provided.) 26 oints Situation 1 2 3 6 4 Lease term (years) Lessor's rate of return 5 8 9%...
Zoom in on the image and the clarity resolves!
The following relate to an operating lease agreement: a. The lease term is 3 years, beginning January 1, 2018 b. The leased asset cost the lessor $750,000 and had a useful life of eight years with no residual value. The lessor uses straight-line depreciation for its depreciable assets. c. Annual lease payments at the beginning of each year were $136,500. d. Incremental costs of negotiating costs of negotiating and consummating the...
Depreciation is an outflow of cash from the use of a plant asset. O measures the decline in market value of an asset. O measures physical deterioration of an asset. O is the process of allocating to expense the cost of a plant asset. QUESTION 5 Having different employees order product, bill customers, receive payments, record them and reconcile the bank statement, will diminish internal control. O only be advisable if the employees have more than 5 years of experience....
4. The lessee's lease analysis Aa Aa Consider the case of Scorecard Corporation: Scorecard Corporation is considering the purchase of new manufacturing equipment that will cost $25,000 (including shipping and installation). Scorecard can take out a four-year, $25,000 loan to pay for the equipment at an interest rate of 6.00%. The loan and purchase agreements will also contain the following provisions: • The annual maintenance expense for the equipment is expected to be $250. • The equipment has a four-year...
The following relate to an operating lease agreement: a. The lease term is 3 years, beginning January 1, 2018. b. The leased asset cost the lessor $760,000 and had a useful life of eight years with no residual value. The lessor uses straight-lir depreciation for its depreciable assets. c. Annual lease payments at the beginning of each year were $134,500. d. Incremental costs of negotiating costs of negotiating and consummating the completed lease transaction incurred by the lessor were $4,950....
Which of the following statements is true? Income tax is a cash inflow Tax depreciation is a cash outflow All sales translate into immediate cash inflows Residual value of an asset is an inflow for a project
Which one of the following represents a cash outflow from a corporation? Multiple Choice Ο Payment of dividends Ο Initial sale of common stock Ο New loan proceeds Ο Issuance of new securities Ο Receipt of tax refund
13 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. (EV of $1. PV of $1. EVA of $1. PVA of $1. EVAD of $1 and PVAD o $1) (Use appropriate factor(s) from the tables provided.) 26 oints Situation 1 2 3 6 4 Lease term (years) Lessor's rate of return 5 8 9%...
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