Present Value of an Ordinary Annuity, Present Value of an Annuity Due, Lease Payments. Carfly Barbers decides to lease a second barbershop. The barbershop has a cash price of $200,000. If Carfly borrowed money to purchase the shop, it would incur a 9% interest rate compounded annually. Answer the following questions: a. What are the lease payments if the agreement requires eight annual payments beginning today ? b. What are the lease payments if the agreement requires eight annual payments beginning one year from the agreement date? c. What are the lease payments if the agreement requires eight annual payments beginning today and Carfly will be able to buy the barbershop at the end of the eight-year lease paying a $30,000 residual value? ( Hint : Subtract the PV of the $30,000 residual value from the cash price of the barbershop to determine the payments using present value tables.)
Present Value of an Ordinary Annuity, Present Value of an Annuity Due, Lease Payments. Carfly Barbers decides to lease a second barbershop. The barbershop has a cash price of $200,000. If Carfly borrowed money to purchase the shop, it would incur a 9% interest rate compounded annually. Answer the following questions: a. What are the lease payments if the agreement requires eight annual payments beginning today ? b. What are the lease payments if the agreement requires eight annual payments beginning one year from the agreement date? c. What are the lease payments if the agreement requires eight annual payments beginning today and Carfly will be able to buy the barbershop at the end of the eight-year lease paying a $30,000 residual value? ( Hint : Subtract the PV of the $30,000 residual value from the cash price of the barbershop to determine the payments using present value tables.)
Present Value of an Ordinary Annuity, Present Value of an Annuity Due, Lease Payments. Carfly Barbers decides to lease a second barbershop. The barbershop has a cash price of $200,000. If Carfly borrowed money to purchase the shop, it would incur a 9% interest rate compounded annually. Answer the following questions:
a. What are the lease payments if the agreement requires eight annual payments beginning today?
b. What are the lease payments if the agreement requires eight annual payments beginning one year from the agreement date?
c. What are the lease payments if the agreement requires eight annual payments beginning today and Carfly will be able to buy the barbershop at the end of the eight-year lease paying a $30,000 residual value? (Hint: Subtract the PV of the $30,000 residual value from the cash price of the barbershop to determine the payments using present value tables.)
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