For the Following Lease,determine the Minimum Lease Payments for the Lessor

question 38

Multiple Choice

For the following lease,determine the minimum lease payments for the lessor. $$\begin{array} { | l | l | } \hline \text { Annual lease payment at the end of the end } & \$ 30,000 \\\hline \text { Lease term } & 5 \\\hline \text { Incremental rate } & 10 \% \\\hline \text { Implicit rate (unknown to lessee) } & 8 \% \\\hline \text { Unguaranteed residual value } & 28,000 \\\hline\end{array}$$

• A)113,723
• B)119,781
• C)131,109
• D)138,838

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Definitions:

Postdating Checks

Writing a check with a date in the future, which means the check cannot legally be cashed or deposited until that date.

Negotiable Instrument

A voucher guaranteeing that a specified sum of money will be paid, either when demanded or at a certain time, with the payer’s identity specified on the voucher.

Substitute

In a legal or contractual context, to replace one obligation, duty, or individual with another.

Cash

represents money in the physical form of currency, such as coins and banknotes, used to purchase goods, services, or settle debts.