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Harlamova29_29 [7]
3 years ago
13

Lease A does not contain a bargain purchase option, but the lease term is equal to 90% of the estimated economic life of the lea

sed property. Lease B does not transfer ownership of the property to the lessee by the end of the lease term, but the lease term is equal to 75% of the estimated economic life of the leased property. Based on this information alone, how should the lessee classify these leases
Business
1 answer:
Katen [24]3 years ago
7 0

Answer: Lease A Capital lease

Lease B Capital lease

Explanation:

A Capital lease is known as a lease agreement in which the lessor ( someone giving out the property) agrees to transfer the ownership rights to the lessee ( someone acquiring or needing the services of the property). After completion of the agreed lease period.

In a capital lease, the lessor is usually mandated to transfer the ownership rights of the asset to the lessee upon the end of the agreed lease term between both parties.

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A city government is considering two types of​ town-dump sanitary systems. Design A requires an initial outlay of ​$405 comma 00
SIZIF [17.4K]

Answer:

Desing A is a better deal as the equivalent annual cost is lower than desing B

Anywa, bot desing cost are above the city collections thus, it cannot afford the sanitary systems unless it raises taxes

Explanation:

<em><u>Desing A </u></em>

F0 405,000

operating and maintenance cost 51,000 for 14 years

Present value of the operating and maintenance cost:

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

C = $ 51,000.00

time = 14 years

rate = 0.07

51000 \times \frac{1-(1+0.07)^{-14} }{0.07} = PV\\

PV $446,018.8673

net worth: $ 851,081.87

equivalent annual cost:

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

PV 851,082

time 14

rate 0.07

851081.87 \div \frac{1-(1+0.07)^{-14} }{0.07} = C\\

C  $ 97,316.904

<u><em>Desing B</em></u>

F0 251,000

operating and maintenance cost 89,000 for 14 years

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

C 89,000.00

time 14

rate 0.07

89000 \times \frac{1-(1+0.07)^{-14} }{0.07} = PV\\

PV $778,346.6507

net worth: $ 1,029,346.65

equivalent annual cost:

1029346.65 \div \frac{1-(1+0.07)^{-14} }{0.07} = C\\

C  $ 117,700.580

5 0
3 years ago
Assume there are currently five firms producing and selling computer chips in the European market. Also assume that the product
irina1246 [14]

Answer: C. Increase

Explanation:

An oligopoly is a market structure in which a few firms dominate. When a market is shared between a few firms, it is said to be highly concentrated. Although only a few firms dominate, it is possible that many small firms may also operate in the market.

Where few firms dominate the equilibrium price will increase because the demand will be high, and this will make the equilibrium price increase.

3 0
3 years ago
Read 2 more answers
Each of the following transactions affects stockholders' equity except:________
attashe74 [19]

Answer:

C

Explanation:.

4 0
3 years ago
Read 2 more answers
Sunset Corp. has a bond outstanding with a coupon rate of 5.94 percent and semiannual payments. The yield to maturity is 5.1 per
borishaifa [10]

Answer:

$2,189.76

Explanation:

<em>The price of a bond is the present value (PV) of the future cash inflows expected from the bond discounted using the yield to maturity.</em>

<em>The price of the bond can be calculated as follows:</em>

<em>Step 1</em>

<em>PV of interest payment</em>

Interest payment =( 5.94%× $2000)/2

= $59.4

Semi annual yield = 5.1/2 = 2.6%

PV of interest payment

= 59.4× (1-(1.026)^(-20×2))/0.026)

= 59.4 × 24.41400537

=<em>$ 1,450.19</em>

Step 2

<em>PV of  redemption value</em>

=  2,000 × (1+0.051)^(-20)

= 2,000 × 0.369781925

=   739.56

Step 3

<em>Price of bond  </em>

= $1,450.19 + $739.56  

=$2,189.76

6 0
3 years ago
All of the following are examples of a business transaction except Select an answer and submit. For keyboard navigation, use the
Simora [160]

Answer:

a A. Thomas invests $2,000 in her business.

DOES NOT QUALIFY AS A BUSINESS TRANSACTION, THIS QUALIFIES AS AN INVESTMENT TRANSACTION

Explanation:

Business transactions must involve two distinct parties, and must result in the exchange of goods or services. Thomas invested on he business, and that is considered an investment transaction, not a business transaction.

b A. Thomas purchases a computer system on account to be used in her business. QUALIFIES AS BUSINESS TRANSACTION, INCREASES ASSETS AND LIABILITIES

c A. Thomas gives an $800 quote to a potential client for services requested.

QUALIFIES AS BUSINESS TRANSACTION, INCREASES REVENUE AND INCOME

d A. Thomas writes check 1002 out of the business checking account to pay the first month's rent on the space her business is leasing. QUALIFIES AS BUSINESS TRANSACTION, INCREASES EXPENSES AND REDUCES INCOME

8 0
3 years ago
Read 2 more answers
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