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

question 54

Multiple Choice

For the following lease,determine the minimum lease payments for the lessee. $$\begin{array} { | l | l | } \hline \text { Annual lease payment at the end of the end } & \$ 25,000 \\\hline \text { Lease term } & 5 \\\hline \text { Incremental rate } & 7 \% \\\hline \text { Implicit rate (knownto lessee) } & 6 \% \\\hline \text { Executory costs } & 2,000 \\\hline\end{array}$$

• A)94,305
• B)96,884
• C)102,505
• D)105,309

---

Definitions:

Economic Development

The method through which a nation, region, or local community's economic prosperity and life quality enhance in line with specified aims and objectives.

Mass Production

The manufacturing of large quantities of standardized products, often using assembly lines or automated technology, which benefits from economies of scale.

Suburbanization

The process by which populations move from urban areas to suburbs, often leading to the growth of residential areas on the outskirts of cities.

Farms

Land and the buildings on it, used for growing crops and/or raising animals as a primary source of income.