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

question 73

Multiple Choice

For the following lease,determine the minimum lease payments for the lessee. $$\begin{array} { | l | l | } \hline \text { Annual lease payment at the end of the end } & \$ 23,150 \\\hline \text { Lease term } & 5 \\\hline \text { Incremental rate } & 8 \% \\\hline \text { Implicit rate (knownto lessee) } & 6 \% \\\hline \text { Guaranteed residual value } & 10,000 \\\hline\end{array}$$

• A)92,431
• B)97,516
• C)99,237
• D)104,989

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Definitions:

Credit Sale

Transactions where goods or services are sold and payment is received at a later date.

Monthly Interest Rate

The interest rate applied to a loan or credit balance on a monthly basis.

Variable Cost

Expenses that vary in relation to the amount of product or service generated by a company.

Sales Price

The final amount of money charged for a product or service, or the value that consumers are willing to pay.