A construction company agreed to lease payments of $514.43 on construction equipment to be made atthe end of every month for 8.75 years. Financing is at 11% compounded monthly.(a) What is the value of the original lease contract?(b) If, due to delays, the first 9 payments were deferred, how much money would be needed after 10payments to bring the lease payments up to date?(c) How much money would be required to pay off the lease after 10 payments?(d) If the lease were paid off after 10 payments, what would the total interest be?(e) How much of the total interest would be due to deferring the first 9 payments?

In summary, we have computed multiple components of a leasing agreement with monthly installments of…

Answered: A construction company agreed to lease…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 3P

See similar textbooks

Similar questions

Owens Company leased equipment for 4 years at 50,000 a year with an option to renew the lease for 6 years at 2,000 per month or to purchase the equipment for 25,000 (a price considerably less than the expected fair value) after the initial lease term of 4 years. Why would this lease qualify as a finance lease?
Give me answer with explanation
Get answer
1.A construction company agreed to lease payments of $536.13 on construction equipment to be made at the end of every month for 5.25 years. Financing is at 9% compounded monthly. (a) What is the value of the original lease contract? (b) If, due to delays, the first 6 payments were deferred, how much money would be needed after 7 payments to bring the lease payments up to date? (c) How much money would be required to pay off the lease after 7 payments? (d) If the lease were paid off after 7 payments, what would the total interest be? (e) How much of the total interest would be due to deferring the first 6 payments? 2.What is the discounted value of payments of $92.00 made at the end of every three months for 8.5 years if interest is 12% compounded quarterly?
Yankee Construction agreed to lease payments of $762.79 on construction equipment to be made at the end of each month for six years. Financing is at 15% compounded monthly. a) What is the value of the original lease contract? b) If, due to delays, the first eight payments were deferred, how much money would be needed after nine months to bring the lease payments up to date? c) How much money would be required to pay off the lease after nine months?
Yankee Construction agreed to lease payments of $762.79 on construction equipment to be made at the end of each month for six years. Financing is at 15% compounded monthly. a) What is the value of the original lease contract? b) If, due to delays, the first eight payments were deferred, how much money would be needed after nine months to bring the lease payments up to date? c) How much money would be required to pay off the lease after nine months? d) If the lease were paid off after nine months, what would the total interest be? e) How much of the total interest would be due to deferring the first eight payments?
Question: Yankee Construction agreed to lease payments of $762.79 on the construction equipment to be made at the end of each month for six years. Financing is at 15% compounded monthly. a) What is the value of the original lease contract? b) If, due to delays, the first eight payments were deferred, how much money would be needed after nine months to bring the lease payments up to date? c) How much money would be required to pay off the lease after nine months? d) If the lease were paid off after nine months, what would the total interest be? e) How much of the total interest would be due to deferring the first eight payments?
A lease agreement valued at $33,000 requires payment of $4,300 every three months in advance. The payments are deferred for three years and month is worth 10% compounded quarterly.a. How many lease payments are to be made under the contract?b. What is the size of the final lease payment?
QUESTION 1: A construction company agreed to lease payments of $452.56 on construction equipment to be made at the end of every month for 9.5 years. Financing is at 11% compounded monthly. (a) What is the value of the original lease contract? (b) If, due to delays, the first 9 payments were deferred, how much money would be needed after 10 payments to bring the lease payments up to date? (c) How much money would be required to pay off the lease after 10 payments? (d) If the lease were paid off after 10 payments, what would the total interest be? (e) How much of the total interest would be due to deferring the first 9 payments? Give typing answer with explanation and conclusion
GLOVERSVILLE Ltd. Prepare the following lease payments schedule for the lease of a machine from Subic Ltd. The machine has an economic life of six years. The lease agreement requires four annual payments of P33,000, and the machine will be returned to Subic Ltd. at the end of the lease term. The lease term payments schedule is: MLP Reduction in Balance in Interest Expense Liability Liability July 1, 2012 98,512 July 1, 2013 30,000 9,851 20,149 78,363 July 1, 2014 30,000 7,836 22,164 56,199 July 1, 2015 30,000 5,620 24,380 31,819 July 1, 2016 3,181 31,819 35,000 125,000 26,488 98,512 The following five multiple choice questions relate to the information provided above. 45. In its notes to the accounts at June 30, 2014. GLOVERSVILLE ltd would disclose future lease payments of what amount? a. P95,000 b. P65,000 c. P99,000 d. P104,000 46. For the year ended June 30, 2013, what would GLOVERSVILLE Ltd record in relation to the lease? a. An interest expense of P9,851 b. An interest expense of…
A vehicle can be purchased by paying $18,000 now, or it can be leased by paying $515 per month for the next three years, with the first payment due on the day of signing the lease. What nominal annual rate of interest compounded monthly is charged on the lease?
A finance lease agreement calls for quarterly lease payments of $5,376 over a 10-year lease term, with the firstpayment on July 1, the beginning of the lease. The annual interest rate is 8%. Both the present value of the leasepayments and the cost of the asset to the lessor are $150,000. What would be the amount of interest expense thelessee would record in conjunction with the second quarterly payment on October 1? What would be the amountof interest revenue the lessor would record in conjunction with the second quarterly payment on October 1?

SEE MORE QUESTIONS

Recommended textbooks for you

EBK CONTEMPORARY FINANCIAL MANAGEMENT

Finance

ISBN:

9781337514835

Author:

MOYER

Publisher:

CENGAGE LEARNING - CONSIGNMENT

Intermediate Accounting: Reporting And Analysis

Accounting

ISBN:

9781337788281

Author:

James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:

Cengage Learning

EBK CONTEMPORARY FINANCIAL MANAGEMENT

Finance

ISBN:

9781337514835

Author:

MOYER

Publisher:

CENGAGE LEARNING - CONSIGNMENT

Intermediate Accounting: Reporting And Analysis

Accounting

ISBN:

9781337788281

Author:

James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:

Cengage Learning

SEE MORE TEXTBOOKS