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Manning Imports is contemplating an agreement to lease equipment to a customer for five years. Manning normally sells the asset for a cash price of $190,000. .Assume that 10% is a reasonable rate of interest. (FV of $1, PV of $1, FVA of S1, PVA of S1, FVAD of $1 and PVAD of S1) (Use appropriate factor(s) from the tables provided.) What must be the amount of quarterly lease payments (beginning at the commencement of the lease) in order for Manning to recover its normal selling price as well as be compensated for financing the asset over the lease term? (Round your answers to nearest whole number and round percentage answer to 1 decimal place.)

Manning Imports is contemplating an agreement to lease equipment to a customer for five years. Manning normally sells the asset for a cash price of $190,000. .Assume that 10% is a reasonable rate of interest. (FV of $1, PV of $1, FVA of S1, PVA of S1, FVAD of $1 and PVAD of S1) (Use appropriate factor(s) from the tables provided.) What must be the amount of quarterly lease payments (beginning at the commencement of the lease) in order for Manning to recover its normal selling price as well as be compensated for financing the asset over the lease term? (Round your answers to nearest whole number and round percentage answer to 1 decimal place.)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Manning Imports is contemplating an agreement to lease equipment to a customer for five years. Manning normally sells the asset for a cash price of $190,000. .Assume that 10% is a reasonable rate of interest. (FV of $1, PV of $1, FVA of $1, PVA of S1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) What must be the amount of quarterly lease payments (beginning at the commencement of the lease) in order for Manning to recover its normal selling price as well as be compensated for financing the asset over the lease term? (Round your answers to nearest whole number and round percentage answer to 1 decimal place.)
Transcribed Image Text:Manning Imports is contemplating an agreement to lease equipment to a customer for five years. Manning normally sells the asset for a cash price of $190,000. .Assume that 10% is a reasonable rate of interest. (FV of $1, PV of $1, FVA of $1, PVA of S1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) What must be the amount of quarterly lease payments (beginning at the commencement of the lease) in order for Manning to recover its normal selling price as well as be compensated for financing the asset over the lease term? (Round your answers to nearest whole number and round percentage answer to 1 decimal place.)
PVA = 1- (1+i)" i n/i 2.0% 2.5% 3.0% 4.0% 4.5% 1 0.99010 0.98522 0.98039 0.97561 0.97087 0.96618 0.96154 0.95694 2 1.97040 1.95588 1.94156 1.92742 1.91347 1.89969 1.88609 1.87267 3 2.94099 2.91220 2.88388 2.85602 2.82861 2.80164 2.77509 4 3.90197 3.85438 3.80773 3.76197 3.71710 3.67308 3.62990 5 4.85343 4.78264 4.71346 4.64583 4.57971 4.51505 4.45182 1.0% 1.5% 3.5% 6 5.79548 5.69719 5.60143 5.50813 7 6.72819 6.59821 8 7.65168 7.48593 9 8.56602 8.36052 10 9.47130 9.22218 8.98259 8.75206 5.0% 5.5% 6.0% 7.0% 0.95238 0.94787 0.94340 0.93458 0.92593 1.85941 1.84632 1.83339 1.80802 1.78326 2.74896 2.72325 2.69793 2.67301 2.62432 2.57710 3.58753 3.54595 3.50515 3.46511 3.38721 3.31213 4.38998 4.32948 4.27028 4.21236 4.10020 3.99271 5.41719 5.32855 5.24214 6.47199 6.34939 6.23028 6.11454 6.00205 5.89270 7.32548 7.17014 7.01969 6.87396 6.73274 6.59589 8.16224 7.97087 7.78611 7.60769 7.43533 7.26879 8.53020 8.31661 8.11090 7.91272 8.0% 5.15787 5.07569 4.99553 4.91732 4.76654 4.62288 5.78637 5.68297 5.58238 5.38929 5.20637 6.46321 6.33457 6.20979 5.97130 5.74664 7.10782 6.95220 6.80169 6.51523 6.24689 7.72173 7.53763 7.36009 7.02358 6.71008 9.0% 10.0% 11.0% 12.0% 20.0% 0.91743 0.90909 0.90090 0.89286 0.83333 1.75911 1.73554 1.71252 1.69005 1.52778 2.53129 2.48685 2.44371 2.40183 2.10648 3.23972 3.16987 3.10245 3.03735 2.58873 3.88965 3.79079 3.69590 3.60478 2.99061 4.48592 4.35526 4.23054 4.11141 3.32551 5.03295 4.86842 4.71220 4.56376 3.60459 5.53482 5.33493 5.14612 4.96764 3.83716 5.99525 5.75902 5.53705 5.32825 4.03097 6.41766 6.14457 5.88923 5.65022 4.19247 11 10.36763 10.07112 9.78685 9.51421 9.25262 9.00155 8.76048 8.52892 8.30641 8.09254 7.88687 7.49867 7.13896 12 11.25508 10.90751 10.57534 10.25776 9.95400 9.66333 9.38507 9.11858 8.86325 8.61852 8.38384 7.94269 7.53608 13 12.13374 11.73153 11.34837 10.98319 10.63496 10.30274 9.98565 9.68285 9.39357 9.11708 8.85268 8.35765 7.90378 14 13.00370 12.54338 12.10625 11.69091 11.29607 10.92052 10.56312 10.22283 9.89864 9.58965 9.29498 8.74547 8.24424 15 13.86505 13.34323 12.84926 12.38138 11.93794 11.51741 11.11839 10.73955 10.37966 10.03758 9.71225 9.10791 8.55948 8.06069 7.60608 7.19087 6.81086 4.67547 6.80519 6.49506 6.20652 5.93770 4.32706 7.16073 6.81369 6.49236 6.19437 4.43922 7.48690 7.10336 6.74987 6.42355 4.53268 7.78615 7.36669 6.98187 6.62817 4.61057
Transcribed Image Text:PVA = 1- (1+i)" i n/i 2.0% 2.5% 3.0% 4.0% 4.5% 1 0.99010 0.98522 0.98039 0.97561 0.97087 0.96618 0.96154 0.95694 2 1.97040 1.95588 1.94156 1.92742 1.91347 1.89969 1.88609 1.87267 3 2.94099 2.91220 2.88388 2.85602 2.82861 2.80164 2.77509 4 3.90197 3.85438 3.80773 3.76197 3.71710 3.67308 3.62990 5 4.85343 4.78264 4.71346 4.64583 4.57971 4.51505 4.45182 1.0% 1.5% 3.5% 6 5.79548 5.69719 5.60143 5.50813 7 6.72819 6.59821 8 7.65168 7.48593 9 8.56602 8.36052 10 9.47130 9.22218 8.98259 8.75206 5.0% 5.5% 6.0% 7.0% 0.95238 0.94787 0.94340 0.93458 0.92593 1.85941 1.84632 1.83339 1.80802 1.78326 2.74896 2.72325 2.69793 2.67301 2.62432 2.57710 3.58753 3.54595 3.50515 3.46511 3.38721 3.31213 4.38998 4.32948 4.27028 4.21236 4.10020 3.99271 5.41719 5.32855 5.24214 6.47199 6.34939 6.23028 6.11454 6.00205 5.89270 7.32548 7.17014 7.01969 6.87396 6.73274 6.59589 8.16224 7.97087 7.78611 7.60769 7.43533 7.26879 8.53020 8.31661 8.11090 7.91272 8.0% 5.15787 5.07569 4.99553 4.91732 4.76654 4.62288 5.78637 5.68297 5.58238 5.38929 5.20637 6.46321 6.33457 6.20979 5.97130 5.74664 7.10782 6.95220 6.80169 6.51523 6.24689 7.72173 7.53763 7.36009 7.02358 6.71008 9.0% 10.0% 11.0% 12.0% 20.0% 0.91743 0.90909 0.90090 0.89286 0.83333 1.75911 1.73554 1.71252 1.69005 1.52778 2.53129 2.48685 2.44371 2.40183 2.10648 3.23972 3.16987 3.10245 3.03735 2.58873 3.88965 3.79079 3.69590 3.60478 2.99061 4.48592 4.35526 4.23054 4.11141 3.32551 5.03295 4.86842 4.71220 4.56376 3.60459 5.53482 5.33493 5.14612 4.96764 3.83716 5.99525 5.75902 5.53705 5.32825 4.03097 6.41766 6.14457 5.88923 5.65022 4.19247 11 10.36763 10.07112 9.78685 9.51421 9.25262 9.00155 8.76048 8.52892 8.30641 8.09254 7.88687 7.49867 7.13896 12 11.25508 10.90751 10.57534 10.25776 9.95400 9.66333 9.38507 9.11858 8.86325 8.61852 8.38384 7.94269 7.53608 13 12.13374 11.73153 11.34837 10.98319 10.63496 10.30274 9.98565 9.68285 9.39357 9.11708 8.85268 8.35765 7.90378 14 13.00370 12.54338 12.10625 11.69091 11.29607 10.92052 10.56312 10.22283 9.89864 9.58965 9.29498 8.74547 8.24424 15 13.86505 13.34323 12.84926 12.38138 11.93794 11.51741 11.11839 10.73955 10.37966 10.03758 9.71225 9.10791 8.55948 8.06069 7.60608 7.19087 6.81086 4.67547 6.80519 6.49506 6.20652 5.93770 4.32706 7.16073 6.81369 6.49236 6.19437 4.43922 7.48690 7.10336 6.74987 6.42355 4.53268 7.78615 7.36669 6.98187 6.62817 4.61057
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