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
On January 1, 2021, Ozark Minerals issued $10 million of 9%, 10-year convertible bonds at 101. The bonds pay interest on June 30
joja [24]

Answer:

Upon issuance, Ozark should "<em>Credit premium on bonds payable $100,000</em>"

Explanation:

Issue price of bond is ($10 million * $101) = $10,100,000

The face value of the bond                       = $10,000,000

The premium on bond = $10,100,000 - $10,000,000

The premium on bond = $100,000

                                   Journal entry

                                                    Debit                   Credit

Cash                                        $10,100,000

Premium on bonds payable                                $100,000

Bonds payable                                                     $10,000,000

Conclusion: Upon issuance, Ozark should "Credit premium on bonds payable $100,000"

7 0
3 years ago
The industrial organization (I/O) model of above-average returns:
lara [203]

Answer:

The answer is A) Puts emphasis on the external environment, which plays a role in determining a company´s ability to achieve above-average returns.

Explanation:

The I/O Model of Above-Average Returns basically assumes that the industry in which a company decides to compete in has a much larger influence on performance (earnings and profit) than the choices the managers of this company make.

The basic assumptions of this organization model are:

  • The external environment imposes pressures and constraints that determine the strategies of the company and will result in above average returns.
  • It assumes competing companies control similar strategically relevant resources and pursue similar strategies.
  • Resources are highly mobile across companies, so that any differences that might develop between companies will be short-lived.
  • Decision-makers within the company are assumed to be rational and committed to acting in the company´s profit-maximizing behaviors.

8 0
3 years ago
This​ year, FCF Inc. has earnings before interest and taxes of ​$10 comma 400 comma 000​, depreciation expenses of ​$1 comma 000
krek1111 [17]

Answer:

Free cash flow is $8,925,000

Explanation:

Free cash flow is the net cash cashflow available for the shareholders or for the reinvestment after paying all capital expenditure.

Free Cash flow

Earning Before Interest and Tax            $10,400,000

Add: Depreciation expenses                  $1,000,000

Less: Capital expenditures                      ​$1,900,000

Less: Increase in net working capital     <u>$575,000    </u>

Free cashflow                                           $8,925,000

8 0
3 years ago
2. A book by Henry Goldman and Elizabeth Howard called Ancient Civilizations. It was published in Philadelphia by Gold House in
777dan777 [17]

Answer:

The question is incomplete because it didn't tell us what action to carry out. However, kindly find the complete question below:

Question:

Using the information from the narrative, create the appropriate MLA citation as if it were going on a  Works Cited page.

Answer / Explanation:

First we need to understand what MLA means: This is simply the abbreviation for modern language association. It refers to a unique style of writing recommended by Modern Language Association (MLA) for preparing research, project paper and manuscripts. This method of writing details issues like quotations, punctuation's especially the documentation of references.

Now referring back to the question asked, the answer goes thus:

Godman, Henry, and Elizabeth Howard. Ancient Civilizations. Philadelphia: Gold.

House, 1989. Print.

6 0
3 years ago
A social environment is BEST described as:
jeka57 [31]

Explanation:

The social environment, social context, sociocultural context or milieu refers to the immediate physical and social setting in which people live or in which something happens or develops. It includes the culture that the individual was educated or lives in, and the people and institutions with whom they interact.

5 0
2 years ago
Read 2 more answers
Other questions:
  • Golden Enterprises started the year with the following: Assets $107,000; Liabilities $37,000; Common Stock $67,000; Retained Ear
    13·1 answer
  • The following data has been provided for a compan most recent year of operations:
    11·1 answer
  • A company's Inventory balance at 12/31/16 was $188,000 and $200,000 at 12/31/15. Its Accounts Payable balance at 12/31/16 was $8
    14·1 answer
  • Lizzie Corporation has provided the following information about one of its laptop computers: Date Transaction Number of Units Co
    15·1 answer
  • You want to adopt a program to improve quality and efficiency within a company. Analyze four quality-control tools (Lean princip
    11·1 answer
  • ​Inflation, nominal interest​ rates, and real rates. From 1991 to​ 2000, the U.S. economy had an annual inflation rate of around
    9·1 answer
  • Match each type of tax with an example of its use.
    7·2 answers
  • How important are signs.symbols and designs in relation to carpentry?if you do not have access to internal.you may answer based
    12·1 answer
  • If labor costs are 60 percent of production costs, then a 15 percent increase in wage rates would increase production costs by:_
    13·1 answer
  • assume that your parents wanted to have saved for college by your 18th birthday and they started saving on your first birthday.
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!