Rabbit Inc

question 15

Multiple Choice

Rabbit Inc.has an asset with a fair market value of $450,000 that it wants to lease.Rabbit's wants to recover its net investment in the leased asset and earn an 8%.The asset will revert back to Rabbit's at the end of a 5-year lease term and it is expected that the residual value of the asset will be $20,000 at the end of the lease.If Rabbit wants to charge rent semi-annually starting at the beginning of the lease, what amount should the lease payments be (rounded to whole dollars) ?

• A)$60,817
• B)$62,096
• C)$101,200
• D)$104,367

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Definitions:

Tariff

A tax imposed on imported goods and services to increase their price, protect domestic industries, or generate revenue.

Roses Imported

The total quantity or value of roses brought into a country from abroad for sale.

Tariff Size

The magnitude of a tax imposed on imported goods, often used by governments to protect domestic industries or generate revenue.

Roses

A type of flowering shrub of the genus Rosa, known for its beauty, fragrance, and cultural significance in many societies.