If a Machine Costs $50,000, and $5,000 a Year for the Lessor

question 45

Multiple Choice

If a machine costs $50,000, and $5,000 a year for the lessor to maintain and insure, what equivalent annual cost would serve as the basis of a full-service lease payment for a six-year operating lease, paid in arrears, if the lessor's cost of capital is 8%?

• A)$15,816
• B)$73,114
• C)$17,155
• D)$55,000

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Definitions:

Distal Phalanx

The small bone at the tip of the fingers and toes, being furthest from the body.

Intermediate Cuneiform

A bone in the human foot located between the other two cuneiform bones and connects to the second metatarsal.

Lateral Cuneiform

One of the bones in the foot positioned within the tarsal region, contributing to foot structure and function.

Lateral Malleolus

The bony prominence on the outer side of the ankle, formed by the lower end of the fibula, involved in ankle stabilization.