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Olenka [21]
3 years ago
9

Blossom Leasing Company agrees to lease equipment to Blue Corporation on January 1, 2020. The following information relates to t

he lease agreement.
1. The term of the lease is 7 years with no renewal option, and the machinery has an estimated economic life of 9 years.
2. The cost of the machinery is $520,000, and the fair value of the asset on January 1, 2020, is $737,000.
3. At the end of the lease term, the asset reverts to the lessor and has a guaranteed residual value of $60,000. Blue estimates that the expected residual value at the end of the lease term will be 60,000. Blue amortizes all of its leased equipment on a straight-line basis.
4. The lease agreement requires equal annual rental payments, beginning on January 1, 2020.
5. The collectibility of the lease payments is probable.
6. Blossom desires a 10% rate of return on its investments. Blue’s incremental borrowing rate is 11%, and the lessor’s implicit rate is unknown.

(Assume the accounting period ends on December 31.)

Compute the value of the lease liability to the lessee. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 58,972.)

Present value of minimum lease payments
$ ?
Business
1 answer:
Serhud [2]3 years ago
4 0

Explanation:

Blossom Leasing Company agrees to lease equipment to Blue Corporation on January 1, 2020. The following information relates to the lease agreement.

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an analyst gathered the following data about a company: 1,000 common shares are outstanding (no change during the year). net inc
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The company's diluted earnings per share is $4.09

<h3>What is Diluted Earnings per share?</h3>

A metric known as "diluted EPS" is used to assess how well a company's earnings per share (EPS) would perform if all convertible securities were exercised. The entire circulating supply of convertible preferred shares, convertible debentures, stock options, and warrants are considered convertible securities. Take a company's net income to determine diluted EPS.

Net income - any preferred/ by the sum of the weighted average number of shares outstanding and dilutive shares (convertible preferred shares, options, warrants, and other dilutive securities).

$5000-$500/1,100= $4.09

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8 0
2 years ago
A lab cost $10 million. it had revenues of $6 million and costs of $4 million. what is its return on investment?
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The return on investment is 0.2%.

<h3>What is the return on investment?</h3>
  • Return on investment (ROI) or return on costs (ROC) is a ratio of net income to investment over time (costs resulting from an investment of some resources at a point in time).
  • A high ROI indicates that the benefits of the investment outweigh the costs.
  • ROI is used as a performance measure to evaluate the efficiency of an investment or to compare the efficiencies of various investments.
  • It is one method of relating profits to capital invested in economic terms.

To find the return on investment:

  • Return on investment:
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Therefore, the return on investment is 0.2%.

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Historical data is kept in a data warehouse. For instance, one can recover documents from 3 months, a half year, a year, or even past data from a data warehouse. These varieties with an exchanges framework, where regularly just the most current record is kept.

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