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Andrew [12]
2 years ago
12

Ace Leasing acquires equipment and leases it to customers under long-term sales-type leases. Ace earns interest under these arra

ngements at a 6% annual rate. Ace leased a machine it purchased for $620,000 under an arrangement that specified annual payments beginning at the commencement of the lease for five years. The lessee had the option to purchase the machine at the end of the lease term for $150,000 when it was expected to have a residual value of $180,000. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Calculate the amount of the annual lease payments.
Business
1 answer:
raketka [301]2 years ago
3 0

Answer:

The lease payment will be for $ 113,751.173  during 5 years beginning at the moment the lease is signed

Explanation:

First, we discount the payment at the end of the lease

\frac{Maturity}{(1 + rate)^{time} } = PV  

Maturity  $150,000

time        5 years

rate        0.06

\frac{150000}{(1 + 0.06)^{5} } = PV  

PV   112,088.7259

Now we subtract form the 620,000 to know the amount to be perceived form the lease payment:

620,000 - 112,089 = 507.911‬

Now we solve  the PMT which makes the annuity-due of 5 payment at the beginning of the period:

PV \div \frac{1-(1+r)^{-time} }{rate} (1+r)= C\\

PV $507,911.0000

time 5

rate 0.06

[tex ]507,911 \div \frac{1-(1+0.06)^{-5} }{0.06}(+0.06) = C\\[/tex]

C  $ 113,751.173

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2 years ago
A country that exports less than it imports will end up having to borrow money
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3 years ago
Gibbs Corporation produces industrial robots for high-precision manufacturing. The following information is given for Gibbs Corp
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Answer:

Gibbs Corporation

1) Fixed cost per unit

= $810

2) ROI per unit

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= $5,960

Explanation:

a) Data and Calculations:

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Direct materials                                                  $410

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Variable selling and administrative expenses $ 56

Fixed selling and administrative expenses                  $ 560,000

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3b) Target selling price, using absorption costing

= Total cost per unit plus Markup = $5,960 ($1,691 + $4,277)

8 0
3 years ago
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Answer:

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