On Cecember 31. 2016, Metlock Corporation signed a 5-yea, non-cancelable lease f

Question

On Cecember 31. 2016, Metlock Corporation signed a 5-yea, non-cancelable lease for a machine. The tems of the lease caled for Metlock to make arnual payments of $8,176 at the begrining of each year, stating December 31, 2016. The macine has an estimated useful life of 6 years and a $5,000 unguere eed res oual wsue. The mach ne everts bdck to the lessor et e er d ve lease ter " et ock uses the straight line ,ethou o deprecation for d of plent esset Metlock?" creme al borrow r rate 5 8 and the lessor's mpliot ate 's ur now . ?(a) Your answer is correct What type of lease is this This is aen lease Attempts: 1 of 5 used ? (b) Compute the presert value of the lesse payments. (For calcufation purposes, use 5 decimal places as displayed in the factor table provided and round final answer to O decimal places, eg. 5,275) Present value of the lease poyments

Explanation / Answer

Present value of the lease payments =8176*4.31213= $35256

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