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
Sophie [7]
3 years ago
14

Sage Hill Company is negotiating to lease a piece of equipment to MTBA, Inc. MTBA requests that the lease be for 9 years. The eq

uipment has a useful life of 10 years. Sage Hill wants a guarantee that the residual value of the equipment at the end of the lease is at least $4,000. MTBA agrees to guarantee a residual value of this amount though it expects the residual value of the equipment to be only $2,500 at the end of the lease term. If the fair value of the equipment at lease commencement is $100,000, what would be the amount of the annual rental payments Sage Hill demands of MTBA, assuming each payment will be made at the beginning of each year and Sage Hill wishes to earn a rate of return on the lease of 8%
Business
1 answer:
Annette [7]3 years ago
7 0

Answer:

$14,621.99

Explanation:

Calculation to determine what would be the amount of the annual rental payments Sage Hill demands of MTBA,

Let X be the annual lease payments

Annuity factor of 8% for 9 years = 6.74664

Discounting factor of 8% at beginning of 9 years = 0.54027

Annual Rental Payments=$100,000 = (X * 6.74664) + ($2,500 * 0.54027)

Annual Rental Payments=$100,000 = (X * 6.74664) + $1350.675

Annual Rental Payments=(X * 6.74664) = $100,000 - 1,350.675

Annual Rental Payments=X = 98,649.325 / 6.74664

Annual Rental Payments=X = $14,621.99

Annual Rental Payments=X = $14,621.99

Therefore, what would be the amount of the annual rental payments Sage Hill demands of MTBA , is $14,621.99

You might be interested in
Which of the following is an other comprehensive income item found in the statement of stockholders equity? a. Extraordinary ite
NISA [10]

Answer:

The correct answer is b. Earnings before income & taxes (EBIT)

Explanation:

Contingencies are not disclosed in the financial statements usually, they are disclosed under disclosures in the financial statements. Also, unrealized gains and extraordinary items are not necessarily showed under the equities statement. However, earnings of a company belongs to its owners, or the shareholders. Because of this EBIT is included.

3 0
3 years ago
Data related to the inventories of Kimzey Medical Supply are presented below:
DedPeter [7]

Answer:

c. $155.

Explanation:

Kimzey Medical Supply's merchandise inventory:

                  Surgical equip.  Surgical supplies  Rehab equip.  Rehab  supplies

Selling price          $335              $195                   $415                    $240

Cost                       $245              $165                   $325                   $237

Replacement         $315              <u>$155</u>                    $310                    $233

cost

Net RV                   $275              $175                    $375                   $200

If we apply the lower of cost or market rule for determining the value of surgical equipment, its value would be: $155 because the replacement cost  (or market price) is lower than the historical cost or the net realizable value.

When we use the lower of cost or market rule, we should value our inventory at the lowest value between original purchase cost, replacement (or market) price or net realizable value.

3 0
3 years ago
Fabian was planning to start his own publishing business. He met a few people who had set up their own publishing agencies and m
andrew-mc [135]
To avoid the mistakes they made
8 0
3 years ago
Read 2 more answers
Freshmart, Inc., began the year with 250 units of inventory at a cost of $55 per unit using variable costing, produced 1,000 uni
Svetach [21]

Answer:

The net income will be "$36,250".

Explanation:

The given values are:

Administrative expenses

= $15,000

Fixed overhead costs

= $30,000

According to the question:

The sales will be:

=  1250 \ units\times 100 \ per \ units

=  125000

The production cost of the variable will be:

=  1250 \ units \times 25 \ per \ units

=  31250

Variable selling will be:

=  1250 \ units\times 10 \ per \ units

=  12500

The net income will be:

⇒  Sales-Production \ cost \ of \ variable-admin \ expenses-fixed \ costs-fixed \ selling

On substituting the values, we get

⇒  125000-31250-12500-30000-15000

⇒  36250 ($)

8 0
3 years ago
Suppose HP’s minorities work at a multicultural plant, which provides a comfortable learning environment before they are assigne
artcher [175]

Answer:b. Resource acquisition

Explanation:Resource Acquisition focuses on defining the needs for the project, and obtaining the right resources for the team and other resources and tools available to manage the effort.

Acquiring resources is the process of securing team members, equipment, materials or other resources required to deliver the project. The key input to acquiring resources is the project plan. The Acquire Resources process is repeated at several stages throughout the project as the need arises.

4 0
3 years ago
Other questions:
  • Maria works for megacorp, a large privately owned company specializing in sales of ball bearings. megacorp introduces filtering
    11·1 answer
  • Suppose that the Fed had followed the Taylor rule before the financial crisis of 2008. In the first quarter of​ 2007, the inflat
    14·1 answer
  • Who knows how to fill out the Journal?
    15·2 answers
  • Suppose that each firm in a competitive industry has the following costs: Total Cost: TC=50+1/2q^2 Marginal Cost: MC=q where q i
    10·1 answer
  • What is meant by 4/5 rule
    7·1 answer
  • Isobel consumes positive quantities of both jam and juice. The price of jam is 10 cents per unit and the price of juice is 5 cen
    10·1 answer
  • If the price level is above the equilibrium price level, how does the aggregate quantity of goods and services demanded compare
    11·1 answer
  • Solve for x and y,when 2x+y-5=0 and 3x-2y-18=0​
    14·1 answer
  • Does anyone else's parent threaten to abuse them when you do bad in school or is it just me?
    6·1 answer
  • a country that has a lower opportunity cost associated with producing a given product compared to another country would have a(n
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!