Use the Following Information for Questions

question 95

Multiple Choice

Use the following information for questions.
Alt Corporation enters into an agreement with Yates Rentals Co.on January 1, 2011 for the purpose of leasing a machine to be used in its manufacturing operations.The following data pertain to the agreement:
(a) The term of the noncancelable lease is 3 years with no renewal option.Payments of $155,213 are due on December 31 of each year.
(b) The fair value of the machine on January 1, 2011, is $400,000.The machine has a remaining economic life of 10 years, with no residual value.The machine reverts to the lessor upon the termination of the lease.
(c) Alt depreciates all machinery it owns on a straight-line basis.
(d) Alt's incremental borrowing rate is 10% per year.Alt does not have knowledge of the 8% implicit rate used by Yates.
-If Yates records this lease as a direct-financing lease, what amount would be recorded as Lease Receivable at the inception of the lease?

• A)$155,213
• B)$385,991
• C)$400,000
• D)$465,638

Understand the Capital Asset Pricing Model (CAPM) and its components.

Explain the significance of the Security Market Line (SML) and its relationship with the CAPM.

Define and discuss the importance of the beta coefficient in measuring systematic risk.

Understand the defining characteristics and significance of modern cities.

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Definitions:

Evolutionary Advantages

Traits or behaviors that increase the chances of survival and reproduction of an organism within its environment, often leading to natural selection.

Mammals

Warm-blooded vertebrate animals characterized by the presence of mammary glands, which females use to feed their young, and hair or fur.

Difference

The state or condition of being unlike in nature, form, or quality.

Primate Grooming

A social behavior found in primates where individuals clean or groom each other's fur, serving both social bonding and hygiene purposes.