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

question 10

Multiple Choice

For the following lease,determine the minimum lease payments for the lessee. $\begin{array}{|l|l|}\hline\text { Annual lease payment at the end of the end } & \$ 23,104 \\\hline \text { Lease term } & 5 \\\hline \text { Incremental rate } & 10 \% \\\hline \text { Implicit rate (unknown to lessee) } & 8 \% \\\hline \text { Unguaranteed residual value } & 10,000 \\\hline \text { Guaranteed residual value } & 20,000\\\hline\end{array}$

• A)87,582
• B)93,792
• C)100,001
• D)106,210

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Definitions:

Rate of Return

Rate of return refers to the profit or loss achieved from an investment during a specific time frame, represented as a percentage of the investment's original price.

Interest Rate

The proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage.

Principle

The original amount of money invested or loaned, before interest is added.

Graduate

A person who has successfully completed a course of study or training, especially one provided by a college or university.