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

question 62

Multiple Choice

For the following lease,determine the minimum lease payments for the lessor. $$\begin{array} { | l | l | } \hline \text { Annual lease payment at the end of the end } & \$ 22,000 \\\hline \text { Lease term } & 5 \\\hline \text { Incremental rate } & 10 \% \\\hline \text { Implicit rate (unknown to lessee) } & 8\% \\\hline \text { Unguaranteed residual value } & 15,000 \\\hline \text { Bargain purchase option } & 5,000 \\\hline\end{array}$$

• A)86,502
• B)91,243
• C)95,816
• D)101,451

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Definitions:

Amortized

The process of gradually paying off a debt or reducing the value of an intangible asset through regular payments over a set period.

Patent

A government-granted exclusive right for an invention, giving the patent owner the right to exclude others from making, using, or selling the invention for a certain period.

Net Income

Net income is the total earnings of a company after subtracting all expenses, taxes, and losses, indicating the company's profitability during a specific time period.

Fair Value

The amount it would take to sell an asset or transfer a liability in a regulated deal between parties in the market at the time of evaluation.