On January 1, 2025, Haystack, Inc. leased equipment to Silver Point Company. The equipment had a cost and fair value of $780,000. The 5-year lease calls for equal annual payments at the beginning of each year. The equipment has an expected useful life of 5 years. The rate implicit in the lease is 8% but the lessee's incremental borrowing rate is 10%. What are the equal annual lease payments the lessor will charge? (Round to whole dollars) D The present value of an ordinary annuity at: 10% for 5 periods is 3.79079 8% for 5 periods is 3.99271 The present value of an annuity due at: 10% for 5 periods is 4.16986 8% for 5 periods is 4.31213 The present value of a single sum of $1 at: 10% for 5 periods is .62092 8% for 5 periods is .68058 O A. $181,972 OB. $180,885 OC. $175,820 O D. $195,356. O E. $162,795
On January 1, 2025, Haystack, Inc. leased equipment to Silver Point Company. The equipment had a cost and fair value of $780,000. The 5-year lease calls for equal annual payments at the beginning of each year. The equipment has an expected useful life of 5 years. The rate implicit in the lease is 8% but the lessee's incremental borrowing rate is 10%. What are the equal annual lease payments the lessor will charge? (Round to whole dollars) D The present value of an ordinary annuity at: 10% for 5 periods is 3.79079 8% for 5 periods is 3.99271 The present value of an annuity due at: 10% for 5 periods is 4.16986 8% for 5 periods is 4.31213 The present value of a single sum of $1 at: 10% for 5 periods is .62092 8% for 5 periods is .68058 O A. $181,972 OB. $180,885 OC. $175,820 O D. $195,356. O E. $162,795
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
can somone please help me solve this? thanks
Transcribed Image Text:On January 1, 2025, Haystack, Inc. leased equipment to Silver Point Company. The equipment had a cost and fair value of $780,000. The 5-year lease calls for equal annual payments at the
beginning of each year. The equipment has an expected useful life of 5 years. The rate implicit in the lease is 8% but the lessee's incremental borrowing rate is 10%. What are the equal
annual lease payments the lessor will charge? (Round to whole dollars)
D
The present value of an ordinary annuity at:
10% for 5 periods is 3.79079
8% for 5 periods is 3.99271
The present value of an annuity due at:
10% for 5 periods is 4.16986
8% for 5 periods is 4.31213
The present value of a single sum of $1 at:
10% for 5 periods is .62092
8% for 5 periods is .68058
O A. $181,972
OB. $180,885
OC. $175,820
O D. $195,356.
O E. $162,795
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