On January 1st, 2014, ABC Inc

question 61

Multiple Choice

On January 1st, 2014, ABC Inc.(the lessor) agrees to lease a piece of specialized piece of machinery to DEF Inc.(the lessee) for 5 years.ABC Inc.is a financial intermediary specializing in leasing arrangements such as the one described below.Details are as follows: Fair value of machinery at inception of the lease: $100,000.Lease term: 5 years (no bargain renewal terms) .
Executory costs of $10,000 are reimbursed by the lessee.
5 Annual lease payments of $23,000 each are made on January 1st of each year starting on January 1st, 2014.
Bargain purchase option at end of lease: $5,000.It is estimated that the equipment will have a fair value of $10,000 at the end of the lease.
Economic life of the asset is 10 years, after which the equipment will be worthless.Straight-line depreciation applies.
ABC's implicit interest rate with respect to this lease is 10%.This is rate is known by DE Inc.
DEF Inc's incremental borrowing rate is 9%.
What would be the amount of finance revenue that ABC Inc.would recognize throughout the lease?

• A)$20,000
• B)$23,000
• C)$5,000
• D)$15,000

Comprehend the legality and implications of insider trading, including the role of tipper and tippee.

Distinguish between shareholders, stakeholders, and officers within a corporation and their respective roles and rights.

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Understand the structure and functions of corporate governance, including the role of the board of directors and voting processes.

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Definitions:

Contingently False

A proposition that is not necessarily false but can be false under certain conditions or circumstances.

Statement

A clear and concise expression or declaration of a fact or belief.

Empirical Nature

Characteristics or properties that are observed through experimentation or experience rather than theory or pure logic.

Factual Disagreement

A situation where individuals or groups have conflicting beliefs or understandings about specific, verifiable information or evidence.