Each of the four independent situations below describes a sales-type lease in which annual lease payments of $16,500 are payable at the beginning of each year. Each is a finance lease for the lessee. Lease term (years) Asset's useful life (years) Lessor's implicit rate (known by lessee) Residual value: Guaranteed by lessee Unguaranteed 5 5 12% $0 50 Determine the following amounts at the beginning of the lease: Note: Round your final answers to nearest whole dollar. none 2 Situation 5 6 12% $6,600 $0 3 4 $ 8,300 no 6 12% $ 3,300 $ 3,300 3 Purchase option: After (years) Exercise price Reasonably certain? $ 4,300 yes Note: Use tables, Excel, or a financial calculator. (EV of $1. PV of $1. EVA of $1. PVA of $1. FVAD of $1 and PVAD of $1) 4 5 $ 2,300 no 5 8 12% 50 $ 6,600
Each of the four independent situations below describes a sales-type lease in which annual lease payments of $16,500 are payable at the beginning of each year. Each is a finance lease for the lessee. Lease term (years) Asset's useful life (years) Lessor's implicit rate (known by lessee) Residual value: Guaranteed by lessee Unguaranteed 5 5 12% $0 50 Determine the following amounts at the beginning of the lease: Note: Round your final answers to nearest whole dollar. none 2 Situation 5 6 12% $6,600 $0 3 4 $ 8,300 no 6 12% $ 3,300 $ 3,300 3 Purchase option: After (years) Exercise price Reasonably certain? $ 4,300 yes Note: Use tables, Excel, or a financial calculator. (EV of $1. PV of $1. EVA of $1. PVA of $1. FVAD of $1 and PVAD of $1) 4 5 $ 2,300 no 5 8 12% 50 $ 6,600
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Each of the four independent situations below describes a sales-type lease in which annual lease payments of $16,500 are payable at
the beginning of each year. Each is a finance lease for the lessee.
Lease term (years)
Asset's useful life (years)
Lessor's implicit rate (known by lessee)
Residual value:
5
12%
Determine the following amounts at the beginning of the lease:
Note: Round your final answers to nearest whole dollar.
$0
$0
2
none
Situation
5
6
12%
$6,600
50
3
4
$ 8,300
no
5
6
12%
$ 3,300
$3,300
Guaranteed by lessee
Unguaranteed
Purchase option:
After (years)
Exercise price
Reasonably certain?
Note: Use tables, Excel, or a financial calculator. (EV of $1. PV of $1. EVA of $1. PVA of $1. EVAD of $1 and PVAD of $1)
4
5
$ 2,300
no
5
8
12%
50
$ 6,600
3
$ 4,300
yes
Transcribed Image Text:Note: Use tables, Excel, or a financial calculator. (FV of $1. PV of $1. FVA of $1. PVA of $1. EVAD of $1 and PVAD of $1)
Determine the following amounts at the beginning of the lease:
Note: Round your final answers to nearest whole dollar.
A. The lessor's:
1. Total lease payments.
2. Gross investment in the lease
3. Net investment in the lease
B. The lessee's:
4. Total lease payments
5. Right-of-use asset
6. Lease liability
Answer is not complete.
Situation
$ 82,500
82,500
82,500
2
82,500
63,677
63,677 X
82,500
65,362 X
59,415
3
82,500
61,355
59,714
82,500
62,660X
61,355
82,500 X
63,335
56,735
82,500
63,587
60,256 X
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