1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
mestny [16]
3 years ago
9

On January 1, James Industries leased equipment to a customer for a four-year period, at which time possession of the leased ass

et will revert back to James. The equipment cost James $700,000 and has an expected useful life of six years. Its normal sales price is $700,000. The residual value after four years, guaranteed by the lessee, is $100,000. Lease payments are due on December 31 of each year, beginning with the first payment at the end of the first year. Collectibility of the remaining lease payments is reasonably assured, and there are no material cost uncertainties. The interest rate is 5%. (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

Guaranteed Residual Value

Table or calculator function: n=?, i=?

Amount ot be recovered (fair value) $?

Guaranteed residual value $?

Amount to be recovered through periodic lease payments $?

Lease Payment

Table or calculator function: PVAD of $1 ?

n=?, i=?

Amount of fair value recovered each lease payment (Lease Payments $?)

* I would like to make sure the answer is correct. Please provide step by step calculate and explain.
Business
1 answer:
MA_775_DIABLO [31]3 years ago
7 0

Answer:

-  $700,000

<u>- 82,270</u>

<u>- </u> $617,730

- present value of $1: n=4, i=5%

- the present value of an ordinary annuity of $1: n=4, i=5%

Explanation:

Amount to be recovered (fair value):                                              $700,000

Less: Present value of the residual value ($100,000 x .82270*):      82,270

Amount to be recovered through periodic lease payments:           $617,730

Lease payments -: end of each of the next four years: ($617,730 ÷ 3.54595**) $174,207

* present value of $1: n=4, i=5%

** present value of an ordinary annuity of $1: n=4, i=5%

You might be interested in
For movement along the demand curve, from an old position to a new one, the price effect is quantifiable as
elena-s [515]

Answer:

This question is incomplete, the options are missing. The options are the following:

A) The old price times the change in quantity.

B) The old price times the new quantity.

C) The new price times the change in quantity.

D) The old quantity times the change in price.

And the correct answer is the option D: The old quantity times the change in price.  

Explanation:

To begin with, the name of <em>"Price Effect"</em> refers to a concept known in economics as the situation where a consumer is affected by the change in the price that a good he plans to buy staying everything else constant. This effect is quantifiable as the old quantity times the change in price when we see the representation in a graphic due to the fact that when the demand curve moves the new position will be established by that new price that have affected the consumer given the same old quantity.

4 0
3 years ago
Employees in an advertising company are well paid, yet they all seem to be lacking interest in work and are demotivated. What no
zysi [14]

the answer here is d

5 0
4 years ago
Which factor makes a currency more attractive to investors
Anna007 [38]
The correct answer is B. A low inflation rate! I hope this helps you!
3 0
3 years ago
Read 2 more answers
Karin Company's loan is due on July 1, 2018. What conditions must Karin meet (at a minimum) so that the note can be classified a
Sindrei [870]

Answer: D. A & C

Explanation:

A long term liability is one that is due to be paid in a period longer than a year. The loan is due in less than a year so the only way to classify it as a long term liability is to make it a loan that will extend past a year. This can be done through refinancing which is to replace the current loan with another loan.  

Karin's company therefore would need to demonstrate that the obligation can be refinanced on a long-term basis by them and they must also have the intention to do so as well.

8 0
3 years ago
Which statement describes the role of the Federal Reserve System? A. It prints all the paper money in circulation in the United
kumpel [21]
The job of the Federal Reserve System is to control the supply of money in the United States. Although it might seem like the Federal Reserve System prints the money as well, but this is in fact not true. The U.S. Treasury prints paper and coin currency and the Federal Reserve System distributes the money globally. 
6 0
3 years ago
Read 2 more answers
Other questions:
  • Travis Company purchased merchandise on account from a supplier for $7,500, terms 2/10, net 30 on December 26. Travis Company pa
    10·1 answer
  • Which domain suffixes do businesses that sell products and services commonly use? Check all that apply.
    9·2 answers
  • Restaurants, like other businesses, often find that the best way to succeed in the market is to:
    8·2 answers
  • Use the following information to answer the question below:
    7·1 answer
  • Allyson Cooke is a union member and an employee of a company that manufactures surgical equipment. She believes she has a grieva
    5·1 answer
  • Describe TWO ways in which the above law protects citizens against human<br>rights violations.<br>​
    14·1 answer
  • Match each organization and agreement with the phrase that best describes it.
    12·2 answers
  • The most common type of two-year college is called a(n):
    10·1 answer
  • Kari is on a trip to italy. she has made a list of cities she would like to tour while she is there, as well as how much she exp
    13·1 answer
  • Hargrave professional group performs legal services on account. what is the effect of this transaction on the balance sheet equa
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!