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lbvjy [14]
3 years ago
9

A lease option is a clause that grants an option holder the right, but not the obligation, to renew the lease, cancel the agreem

ent, relocate within a property, or even expand to adjacent space. The existence of these options in a leasing agreement:
A. Reduces the expected present value of lease cash flows to the owner
B. Increases the expected present value of lease cash flows to the owner
C. Does not impact the expected present value of lease cash flows to the owner
D. Causes the expected present value of lease cash flows to equal zero
Business
1 answer:
kow [346]3 years ago
8 0

Answer:

B. Increases the expected present value of lease cash flows to the owner

Explanation:

A lease option gives a right but not the obligation to the renter of the property to buy the said property at today's current market price upon the expiry of lease term.

Lease option is similar to an option contract, the difference being, here instead of securities, leased property serves as the underlying asset and instead of option premium, the renter pays a premium each year in addition to the rental charges.

Lease cash flows refer to the present value of future cash flows which the lessor/owner receives in the form of lease rentals plus the added premium each year.

The more the benefits under lease option clause, the higher the premium charged and thus, more would be the future receipts of owner which would increase the expected present value of lease cash flows to the owner.

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Anderson Corporation has provided the following production and average cost data for two levels of monthly production volume. Th
Nataly_w [17]

Answer:

The total monthly fixed manufacturing cost is $328,000.

Explanation:

For 4000 units, The direct materials cost is $99.2 per unit, the direct labor cost is $45.5 per unit, the manufacturing overhead cost is $94.

For 5000 units, The direct materials cost is $99.2 per unit, the direct labor cost is $45.5 per unit, the manufacturing overhead cost is $77.6.

Total manufacturing overhead for 4,000 units

= 4,000\ \times\ 94

= $376,000

Total manufacturing overhead for 5,000 units

= 5,000\ \times\ 77.6

= $388,000

The variable cost per unit

= \frac{388,000\ -\ 376,000}{1,000}

= $12 per unit

Fixed costs

= Total cost - Total variable costs

= 388,000\ -\ (5,000\ \times\ 12)

= $328,000

5 0
3 years ago
A profit-maximizing firm in a competitive market that is producing on a production curve where the marginal product of labor is
wlad13 [49]

Answer: A. a downward-sloping labor demand curve.

Explanation:

If the marginal product of labor is diminishing then that means that for every extra worker hired, less products are made than the last worker. As a result of this, companies will not want to pay high wages to workers because they would be bringing in less revenue when hired.

This will cause a downward-sloping labor demand curve that shows that as more workers are hired, the company would like to pay less wages because each new worker is only producing less than the last worker.

8 0
3 years ago
Cardiogenic shock following ami is caused by:
stellarik [79]

Cardiogenic shock following ami is caused by:

  • Decreased pumping force of the heart muscle.

<h3>What is Cardiogenic Shock?</h3>

Cardiogenic shock is an aftermath of Acute Myocardial Infarction. It arises because of the body's sudden inability to pump a sufficient amount of blood to the vital organs of the body.

The mortality rate due to cardiogenic shock is above average.

Learn more about cardiogenic shock here:

brainly.com/question/23788456

#SPJ12

3 0
2 years ago
For biomedical engineers, what degree is generally required to teach in a university setting?
Bess [88]
<span>Most nursing departments and schools employ different types of faculty, and depending on the position. Those who work at a university typically hold doctoral degrees related to the biomedical degree</span>
5 0
3 years ago
Read 2 more answers
The entity’s manufacturing division, whose assets constituted 75% of its total assets at September 30, Year 5 (end of year), was
belka [17]

The event should be presented in the financial statements as follows:

1. The assets side of the balance sheet will be reduced by 75%, with its accompanying accumulated depreciation.

2. The bonded liability on the balance sheet is eliminated by the relevant amount.

3. The journal entry should debit the Bonded Liability and accumulated depreciation, while the assets worth 75% are credited.

4. If the bonded indebtedness is more than 75% of the assets, the company records a profit on disposal on the income statement. Otherwise, it records a loss. If they are equal, there is no profit or loss.

Thus, the difference between the debit and credit entries constitutes either profit or loss on disposal.

Learn more: brainly.com/question/17329408

5 0
2 years ago
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