Acct2206Registratero xy à (6 unread) . mkennet2.. x Ch. 15 Test x C ezto.mheduca
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Question
Acct2206Registratero xy à (6 unread) . mkennet2.. x Ch. 15 Test x C ezto.mheducation.com/hmtpx 10.00 points Exercise 15-14 Calculation of annual lease payments, residual value [LO15-5, 15-6, 15-81 Each of the four independent situations below describes a capital lease in which annual lease payments are payable at the beginning of each year (FV ot $L. PV of $1. EVA of S1. PVA of $1. EVAD of $1 and PVAD of 3) (Use appropriate factor(s) from the tables provided.) Situation Lease term (years) Lessors rate of return Fair value of leased asset Lessor's cost of leased asset 63,000 363.000 $58,000 856 10% 5 63,000 S 363,000 $ 88,000 478,000 478,000 Residual value Guaranteed by lessese D $ 63,000 0 43,000 0 $ 20,000 $28,000 Determine the annual lease payrments for oach situstion Situation 4 Exerase 15-14 Caleaine al anesal frooh TOSHIBA esc 2 3 4 5 6 tab 9Explanation / Answer
Situation 1 2 3 4 Lease term(years) 5 8 6 9 Lessor's rate of return 8% 9% 7% 10% Fair value of leased asset 63000 363000 88000 478000 Lessor's cost of leased asset 63000 363000 58000 478000 Residual Value Gauranteed by lessee 0 63000 0 43000 Ungauranteed 0 0 20000 28000 Annaul lease payment 14609.96 54928.73 14641.23 70701.54 See working below) Annual lease payment for Situation 1 Year PVIF@8% 0 1 1 0.92592593 2 0.85733882 3 0.79383224 4 0.73502985 5 PVIFA(5,8%) 4.31212684 63,000.00 14609.9598 Situation 2 Year PVIF@9% 0 1 1 0.91743119 2 0.84167999 3 0.77218348 4 0.70842521 5 0.64993139 6 0.59626733 7 0.54703424 8 0.50186628 63000 31617.58 Fair value 363000 Fair value after discounted residual value-A 331382.4 PVIFA(8,9%) B 6.032953 Annual lease payment A/B 54928.73 Situation 3 Year PVIF@7% 0 1 1 0.93457944 2 0.87343873 3 0.81629788 4 0.76289521 5 0.71298618 6 0.66634222 20000 13326.84 Fair value 88000 Fair value after discounted residual value-A 74673.16 PVIFA(6,7%) B 5.100197 Annual lease payment A/B 14641.23 Situation 4 Year PVIF@10% 0 1 1 0.90909091 2 0.82644628 3 0.7513148 4 0.68301346 5 0.62092132 6 0.56447393 7 0.51315812 8 0.46650738 9 0.42409762 71000 30110.93 Fair value 478000 Fair value after discounted residual value-A 447889.1 PVIFA(9,10%) B 6.334926 Annual lease payment A/B 70701.54 Note : fair value has to be equal to discounted(by interest rate) annual lease payment+gauranteed +ungauranteed residual value of a leased asset.