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a.
To calculate: The lease period as a percentage for the estimated life of the leased property of Deluxe Corporation.
Introduction:
Lease:
It refers to the contract between two parties, that is, lessee (user) and lessor (owner) defining the terms in which one party agrees to pay rent in exchange of usage of the property that is owned by another party.
b.
To calculate: The PV of lease payments as a percentage to the fair value of the property of Deluxe Corporation.
Introduction:
Present value (PV):
The current value of an investment or an asset is termed as its present value. It is calculated by discounting the
c.
To determine: Whether the lease will be recorded as a capital lease or an operating lease of Deluxe Corporation.
Introduction:
Capital lease:
It refers to the lease agreement in which the owner of the property is ready to transfer the rights of ownership to the user of the property after the expiration of lease period.
Operating lease:
It refers to the lease contract in which the owner of the property grants the user for usage of an asset for a specified period of time but without transferring the rights of ownership of asset.
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Chapter 16 Solutions
Foundations of Financial Management
- What is the finance ? tell about its significant.arrow_forwardTake value of 1.01^-36=0.699 . step by steparrow_forwardsolve this question.Pat and Chris have identical interest-bearing bank accounts that pay them $15 interest per year. Pat leaves the $15 in the account each year, while Chris takes the $15 home to a jar and never spends any of it. After five years, who has more money?arrow_forward
Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
EBK CONTEMPORARY FINANCIAL MANAGEMENTFinanceISBN:9781337514835Author:MOYERPublisher:CENGAGE LEARNING - CONSIGNMENT