Ans Assignment Financial Accounting [5 points]Green Path Landscaping purchased equipment through a 5-year capitallease. Annual payments are $12,000, and the implicit interest rate is 6%.Calculate the present value of the lease (using PVA factor of 4.2124 for 5years at 6%). Round your answer.

Concept of Present Value of Annuity (PVA)The present value of an annuity is the current worth of a…

Answered: Assignment Financial Accounting [5…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 21P

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Green Path Landscaping purchased equipment through a 5-year capital lease. Annual payments are $12,000, and the implicit interest rate is 6%. Calculate the present value of the lease (using PVA factor of 4.2124 for 5 years at 6%). Round your answer. Ans
financial accounting 5 point assignment
Green Path Landscaping purchased equipment through a 5-year capital lease. Annual payments are $12,000, and the implicit interest rate is 6%. Calculate the present value of the lease (using PVA factor of 4.2124 for 5 years at 6%). Round your answer.
OPTIONAL PROJECT Amortization Schedule - Long-term Note See Example video for help in creating a PV/FV chart and amortization schedule. On January 1, 2020 Adventure Park Corp. borrowed $350,000 in order to buy the Wild Saucer ride. The loan had an annual rate of 5% and an 8 year maturity date. Determine the blended annual year-end payments by preparing a PV/FV chart. N (period of time) I (Interest) PV (Present Value FV (Future Value) PMT (Annuity) Prepare the loan amortization schedule. Beginning Period Annual Payment Interest Expense Principal Payment Principal Balance Balance Page 1 2 3 4 5 7 8 If the loan was paid off at the end of year 6 how much would Arcade Company save in interest? Use a formula to calculate your solution. Answer: Explain why the interest on the loan decreases each year? Answer:
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Quantitative Problem 1: Findley Furniture Company must install $5.9 million of new equipment in one of its plants. It can obtain a bank loan for 100% of the required amount. Alternatively, management believes it can arrange a lease. Assume that the following facts apply: 1. The equipment falls in the MACRS 5-year class. The applicable MACRS rates are 20%, 32%, 19%, 12%, 11%, and 6%. 2. The lease includes maintenance, whereas if the equipment is purchased, it would require maintenance provided by a service contract for $120,000 per year, payable at the end of the year. 3. Findley's federal-plus-state tax rate is 35%. 4. If the money is borrowed, the bank loan will be at a rate of 10%, amortized in 5 equal installments to be paid at the end of each year. 5. The tentative lease terms call for end-of-year payments of $1.25 million per year for 5 years. 6. At the end of the lease term, the equipment will have an estimated salvage value of $950,000. At that time, Findley plans to replace the…
Finance Q.4- The Nail Inc. wishes to acquire a $100,000 wood cutting machine, which it plans to use for seven years. At the end of this time, the machine's residual value will be $24,000. The asset falls into the five-year property class for cost recovery (depreciation) purposes. The company can use either a "true" lease or debt financing. Lease payments of $16,000 at the beginning of each of the seven years would be required. If debt-financed, the interest rate would be 14 percent, and debt payments would be due at the beginning of each of the eight years. (Interest would be amortized as a mortgage- type of debt instrument.) The company is in a 40 percent tax bracket. Which method of financing has the lower present value of cash outflows?
Calculating Lessor Payment-Guaranteed Residual Value Quest Inc. is negotiating an agreement to lease equipment to a lessee for 8 years. The equipment has a useful life of 10 years. The fair value of the equipment is $28,000 and the lessor expects a rate of return of 8% on the lease contract. The lessee guarantees a residual value of $7,000 at the end of the 8-year lease term. If the first annual payment is required at the end of the first year following the commencement of the lease, what fixed lease payment should Quest Inc. charge in order to earn its expected rate of return on the contract? • Note: Enter the answer in dollars and cents, rounded to the nearest penny. • Note: Do not use a negative sign with your answer. Lease payment $ 4,379.94 *

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Assignment Financial Accounting [5 points] Green Path Landscaping purchased equipment through a 5-year capital lease. Annual payments are $12,000, and the implicit interest rate is 6%. Calculate the present value of the lease (using PVA factor of 4.2124 for 5 years at 6%). Round your answer.