For each of the three independent situations below determine the
amount of the annual lease payments. Each describes a finance lease
in which annual lease payments are payable at the beginning of each
year. Each lease agreement contains an option that permits the
lessee to acquire the leased asset at an option price that is
sufficiently lower than the expected fair value that the exercise
of the option appears reasonably certain. (FV of $1, PV of $1, FVA
of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use
appropriate factor(s) from the tables provided.)
Situation | |||||||||
1 | 2 | 3 | |||||||
Lease term (years) | 5 | 5 | 4 | ||||||
Lessor's rate of return | 8 | % | 9 | % | 7 | % | |||
Fair value of leased asset | $ | 70,000 | $ | 425,000 | $ | 190,000 | |||
Lessor's cost of leased asset | $ | 55,000 | $ | 425,000 | $ | 150,000 | |||
Purchase option: | |||||||||
Exercise price | $ | 15,000 | $ | 55,000 | $ | 27,000 | |||
Exercisable at end of year: | 5 | 5 | 3 | ||||||
Reasonably certain? | yes | no | yes | ||||||
Determine the annual lease payments for each situation
(Round your intermediate and final answer to the nearest
whole dollar amount.):
For each of the three independent situations below determine the amount of the annual lease payments....
For each of the three independent situations below determine the amount of the annual lease payments. Each describes a finance lease in which annual lease payments are payable at the beginning of each year. Each lease agreement contains an option that permits the lessee to acquire the leased asset at an option price that is sufficiently lower than the expected fair value that the exercise of the option appears reasonably certain. (FV of $1, PV of $1, FVA of $1,...
For each of the three independent situations below determine the amount of the annual lease payments. Each describes a finance lease in which annual lease payments are payable at the beginning of each year. Each lease agreement contains an option that permits the lessee to acquire the leased asset at an option price that is sufficiently lower than the expected fair value that the exercise of the option appears reasonably certain. (EV of $1. PV of $1. EVA of $1....
For each of the three independent situations below determine the amount of the annual lease payments. Each describes a finance lease in which annual lease payments are payable at the beginning of each year. Each lease agreement contains an option that permits the lessee to acquire the leased asset at an option price that is sufficiently lower than the expected fair value that the exercise of the option appears reasonably certain (EV of $1. PV of $1, EVA of $1....
*just need situation 2&3 answered For each of the three independent situations below determine the amount of the annual lease payments. Each describes a finance lease in which annual lease payments are payable at the beginning of each year. Each lease agreement contains an option that permits the lessee to acquire the leased asset at an option price that is sufficiently lower than the expected fair value that the exercise of the option appears reasonably certain (EV of $1. PV...
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