Question

Your client, Keith Marin Leasing Company, is preparing a contract to lease a machine to Souvenirs Corporation for a period of 26 years. Marin has an investment cost of $428,700 in the machine, which has a useful life of 26 years and no salvage value at the end of that time. Your client is interested in earning an 8% return on its investment and has agreed to accept 26 equal rental payments at the end of each of the next 26 years. Click here to view factor tables You are requested to provide Marin with the amount of each of the 26 rental payments that will yield an 8% return on investment. (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.)

Amount of each rental payments = ?

Answer #1

Problem 6-5 Julia Baker died, leaving to her husband Leon an
insurance policy contract that provides that the beneficiary (Leon)
can choose any one of the following four options. Money is worth
2.50% per quarter, compounded quarterly. Compute Present value if:
Click here to view factor tables (a) $55,240 immediate cash. (Round
factor values to 5 decimal places, e.g. 1.25124 and final answer to
0 decimal places, e.g. 458,581.) Present value $ 55240 (b) $4,090
every 3 months payable at...

Windsor Leasing Company signs an agreement on January 1, 2020,
to lease equipment to Cole Company. The following information
relates to this agreement.
1.
The term of the non-cancelable lease is 6 years with no renewal
option. The equipment has an estimated economic life of 6
years.
2.
The cost of the asset to the lessor is $451,000. The fair value
of the asset at January 1, 2020, is $451,000.
3.
The asset will revert to the lessor at the...

Riverbed Leasing Company purchased specialized equipment from
Wayne Company on December 31, 2019 for $510,000. On the same date,
it leased this equipment to Sears Company for 5 years, the useful
life of the equipment. The lease payments begin January 1, 2020 and
are made every 6 months until July 1, 2024. Riverbed Leasing wants
to earn 10% annually on its investment.
Various
Factors at 10%
Periods
or Rents
Future
Value of $1
Present
Value of $1
Future Value of...

$51,270 receivable at the end of each period for 8 periods
compounded at 11%. (Round factor values to 5 decimal
places, e.g. 1.25124 and final answer to 0 decimal places, e.g.
458,581.)
Present value
$ enter the present value in dollars rounded to 0 decimal
places
$51,270 payments to be made at the end of each period for 16
periods at 9%. (Round factor values to 5 decimal
places, e.g. 1.25124 and final answer to 0 decimal places, e.g.
458,581.)...

Swifty Leasing Company leases a new machine that has a cost and
fair value of $72,000 to Sharrer Corporation on a 3-year
noncancelable contract. Sharrer Corporation agrees to assume all
risks of normal ownership including such costs as insurance, taxes,
and maintenance. The machine has a 3-year useful life and no
residual value. The lease was signed on January 1, 2017. Swifty
Leasing Company expects to earn a 9% return on its investment. The
annual rentals are payable on each...

Brief Exercise 21-24
Marin, Inc. has entered an agreement to lease an old warehouse
with a useful life of 5 years and a fair value of $36,000 from
United Corporation. The agreement stipulates the following.
●
Rental payments of $8,633 are to be
made at the start of each year of the 5-year lease. No residual
value is expected at the end of the lease.
●
Marin must reimburse United each
year for any real estate taxes incurred for the...

Leon Jackson invests $37,500 at 10% annual interest, leaving the
money invested without withdrawing any of the interest for 10
years. At the end of the 10 years, Leon withdraws the accumulated
amount of money.
Compute the amount Leon would withdraw assuming the investment
earns simple interest. (Round answers to 0 decimal
places, e.g. 458,581.)
Compute the amount Leon would withdraw assuming the investment
earns interest compounded annually. (Round factor
values to 5 decimal places, e.g. 1.25124 and final answer...

Using the appropriate interest table, compute the present values
of the following periodic amounts due at the end of the designated
periods. Click here to view factor tables $50,440 receivable at the
end of each period for 8 periods compounded at 11%. (Round factor
values to 5 decimal places, e.g. 1.25124 and final answer to 0
decimal places, e.g. 458,581.) Present value $ Click here to view
factor tables $50,440 payments to be made at the end of each period...

The following facts pertain to a noncancelable lease agreement
between Mooney Leasing Company and Rode Company, a lessee.
Inception date:
May 1, 2017
Annual lease payment due at the beginning of
each year, beginning with May 1, 2014
$20,471.94
Bargain-purchase option price at end of lease term
$4000.00
Lease term
5
years
Economic life of leased equipment
10
years
Lessor’s cost
$65,000.00
Fair value of asset at May 1, 2017
$91,000.00
Lessor’s implicit rate
8
%
Lessee’s incremental borrowing rate...

Kingbird Leasing Company signs a lease agreement on January 1,
2020, to lease electronic equipment to Blossom Company. The term of
the non-cancelable lease is 2 years, and payments are required at
the end of each year. The following information relates to this
agreement:
1.
Blossom has the option to purchase the equipment for $15,000
upon termination of the lease. It is not reasonably certain that
Blossom will exercise this option.
2.
The equipment has a cost of $100,000 and...

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 13 minutes ago

asked 20 minutes ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 2 hours ago

asked 2 hours ago

asked 2 hours ago

asked 3 hours ago

asked 3 hours ago

asked 3 hours ago

asked 3 hours ago