Three independent situations are given. Each describes a finance lease in which annual lease payments are payable at the beginning of each year. Each lease agreement contains an option that permits the lessee to acquire the leased asset at an option price that is sufficiently lower than the expected far value that the exercise of the option appears 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 Situatio 10 $ 431,000 $41,000 $156,000 Lease tere (years) Lesson's rate of return tair value of leased asset Lesson's cast of leased asset Purchase option Exercise price Exercisable at end of year Reasonably certain $ 12,000 $21,000
Three independent situations are given. Each describes a finance lease in which annual lease payments are payable at the beginning of each year. Each lease agreement contains an option that permits the lessee to acquire the leased asset at an option price that is sufficiently lower than the expected far value that the exercise of the option appears 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 Situatio 10 $ 431,000 $41,000 $156,000 Lease tere (years) Lesson's rate of return tair value of leased asset Lesson's cast of leased asset Purchase option Exercise price Exercisable at end of year Reasonably certain $ 12,000 $21,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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