Consistency, simplicity, the risk-return relationship, investment objectives, diversification are the five basic investment cons
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Answer:
The amount of annual rental payment = $4,906.205 per annum
Explanation:
Amount of lease payment that Mequon Inc must demand for earning 6% rate of return i.e discounting factor:
=3.465
Amount that will be paid per year:
[(Value of machinery-resifual value at the end of 4 yers expected by Mequon)/discounting factor for 4 years at 6%]
=($47,000-$30,000)/3.465
=$4,906.205(approx.) per annum.