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Furkat [3]
3 years ago
12

On December 31, 2021, Perry Corporation leased equipment to Admiral Company for a five-year period. The annual lease payment, ex

cluding nonlease components, is $40,000. The interest rate for this lease is 10%. The payments are due on December 31 of each year. The first payment was made on December 31, 2021. The normal cash price for this type of equipment is $125,000 while the cost to Perry was $105,000. For the year ended December 31, 2021, by what amount will Perry's earnings increase due to this lease (ignore taxes)
Business
1 answer:
ivanzaharov [21]3 years ago
3 0

Answer:

$20,000

Explanation:

Calculation to determine by what amount will Perry's earnings increase due to this lease

Using this formula

Selling price=Fair value-Cost

Let plug in the formula

Selling price=$125,000-$105,000

Selling price=$20,000

Therefore The amount that Perry's earnings will increase due to this lease is $20,000

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Explanation:

The computation of the present value of the cash flows should be shown in the excel spreadsheet. Kindly find the two attachment out of which one attachment contains the final values, the other attachment contains the formula sheet

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8 0
3 years ago
pAn office building owner agrees to buy a minimum of 270 chairs and up to 440 chairs from a supplier. The price will be $85 per
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Answer:

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Explanation:

Working file has been attached to help understand how the answer was derived. Some points to note in the sheet are:

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4 0
3 years ago
Taxes a distort incentives and this distortion causes markets to allocate resources inefficiently. b do not distort incentives,
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Answer:

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If a $4,000 debit to Equipment in a journal entry is incorrectly posted to the ledger as a $4,000 credit and the ledger account
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Channeling funds from individuals with surplus funds to those desiring funds when the saver does not purchase the borrower's sec
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