What is the NPV of leasing versus buying?Enter a response then click Submit below$0Submit Buy VanLease VanBuy/Lease TermDepreciationTermTax RateInterest RateAfter-TaxInterest RateBuyYearPaymentDepreciationTax DeductionNet PaymentLeaseYearPaymentTax DeductionNet Payment$31,648$14,065 Per Year3 Years110 Years21.0%7.8%6.2%$12,236$3,165$665$11,5711$14,065$2,954$11,1112$12,236$3,165$665$11,5712$14,065$2,954$11,1113$12,236$3,165$665$11,5713$14,065$2,954$11,111

NPV of leasing is the difference between present value of buying and present value of leasing and it…

Answered: Buy Van Lease Van Buy/Lease Term…

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

ChapterA: Appendix - Time Value Of Cash Flows: Compound Interest Concepts And Applications

Section: Chapter Questions

Problem 28E

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Problem 6. Sales and Leaseback On Januar y 1 20х1, Entity sold building to Entity and a simultaneously leased it back. Additional information follows : Fair value of building 1,000,000 Carrying amount of building 800,000 Remaining useful life of building 10 years Lease Term 5 years Annual rent payable at the end of each year 100,000 Implicit interest rate equal to market rate 12% The transfer qualifies as a sale. Requirements (Independent cases) : а. If the sales price is P1,000,000 which is equal to fair value compute t he following under the seller-lessee accounting i. Lease liability ii. Right of use Asset iii. Gain or Loss iv. Journal entries on January 1, 20x1 b. If the sales price is P1,000,000 which is equal to fair value compute the following under the buyer-lessor acco unting i. Gross Investment ii. Net Investment iii. Unearned Interest Income iv. Journal entries on January 1, 20x1 c. Same requirements in a and b but the sales price is P1,100,000 which is above the fair value…
H1. Account 8% rate of return with annual rental payment of 81419
Fair value of plan asset, January 1, 2014 2,000,000Total actual return on plan asset: Interest income – actual 200,000 Gain on remeasurement 100,000 300,000Tax rate on defined benefit 15%Expected rate of return on the asset 7%Discount rate 6%Contribution during the year 500,000 What is the fair value of the plan asset as of December 31, 2014?
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$100,000 x 4.79079* = Lease Payments $479,079 Right-of-Use Asset *Present value of an annuity due of $1: n = 6,i = 10%
1-3
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Problem 1 At the beginning of the current year, an entity leased an equipment from a lessor with the following pertinent information: 1,000,000 400,000 300,000 100,000 700,000 200,000 500,000 5 years 8 years 10% Annual rental payable at the end of each year Initial direct cost paid Lease bonus paid to lessor before commencement of the lease Lease incentive received Discounted amount of restoring building as required by contract Leasehold improvement Purchase option that is reasonably certain to be exercised Lease term Useful life of building Implicit interest rate Incremental borrowing rate 12% What is the initial lease liability? Select the correct response: 4,290,000
O e. $300,000 Jestion 3 For an operating lease, which statement is TRUE? ot yet swered Select one: ints out of O a. The Right of Use asset amortization amount will decrease each year. O b. Annual Lease Expense will be the amortization of the Right of Use asset less that year's interest expense. Flag question Oc. The recorded Lease Expense amount will be the same each year. O d. The annual amortization of the Right of Use asset will be debited to Amortization Expense each year. O e. To compute the cost of the Right of Use asset, the lessee will use the incremental rate, if known. estion 4 Indicate the type of Deferred Tax account created by Unearned Revenues and Accrued Revenues, respectively: yet wered Select one: nts out of O a. Asset, Asset O b. Liability, Asset O c.Asset, Liability O d. Liability, Liability Flag question stion 5 Which of the following requires intraperiod tax allocation? yet wered Select one: nts out of O a. Discontinued Operations Loss O b. Estimated Warranty…
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domestic
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Buy Van Lease Van Buy/Lease Term Depreciation Term Tax Rate Interest Rate $31,648 $14,065 Per Year 3 Years 10 Years 21.0% 7.8%