ABC Company is the lessee and will lease an asset owned by XYZ Company. The semi-annual cash payments, required to be made by ABC, are $500,000. The lease goes for 5 years, and starts on January 1, 2021. Assume a capital lease. The periodic payments are due on June 30 and December 31 of each year. ABC uses an interest rate of 10%. What is the present value of the lease payments? $3,860,867 $1,895,393 $3,790,787 $5,000,000
Mortgages
A mortgage is a formal agreement in which a bank or other financial institution lends cash at interest in return for assuming the title to the debtor's property, on the condition that the obligation is paid in full.
Mortgage
The term "mortgage" is a type of loan that a borrower takes to maintain his house or any form of assets and he agrees to return the amount in a particular period of time to the lender usually in a series of regular equally monthly, quarterly, or half-yearly payments.
ABC Company is the lessee and will lease an asset owned by XYZ Company. The semi-annual cash payments, required to be made by ABC, are $500,000. The lease goes for 5 years, and starts on January 1, 2021. Assume a capital lease. The periodic payments are due on June 30 and December 31 of each year. ABC uses an interest rate of 10%. What is the present value of the lease payments?
$3,860,867
$1,895,393
$3,790,787
$5,000,000
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