Crone Co. has machinery that cost $143,000. It is to be leased for 15 years with
ID: 2405068 • Letter: C
Question
Crone Co. has machinery that cost $143,000. It is to be leased for 15 years with rent received at the beainning of each year Crone wants a return of 13% (Use the below table.) PRESENT VALUE OF AN ANNUITY DUE OF 1 10% 11% 12% 15% 1.00000 100000 1.00000 1.00000 1.90909 2.73554 3.48685 4.16986 1.86957 2.78326 2.69005 3.40183 4.03735 3.53130 3.4437 4.10245 3.28323 3.85498 4.31213 4.88965 5.48592 4.79079 4.69590 4.60478 4.35216 5.62288 6.74664 7.24689 5.86842 6.33493 6.75902 5.7122O 6.14612 6.53705 5,56376 5.96764 6.32825 5.16042 5.48732 5.77158 6.99525 7.71008 8.13896 8.53608 8.90378 9.24424 7.41766 6.88923 7.20652 6.65022 6.93770 8.01877 7.49506 7.81369 8.10336 6.23371 6.58315 8.78615 7.98187 7.62817 6.72448 6.84737 8.19087 8.37916 9.85137 10.12164 7.97399 9.02155 8.54879Explanation / Answer
Annual rental payment = 143000/Present value of an Annuity due of $1(n=15,i=13%) = 143000/7.30249= $19582
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