(Ignore Income Taxes in This Problem

question 16

Multiple Choice

(Ignore income taxes in this problem.) Suddeth Corporation has entered into a 6 year lease for a building it will use as a warehouse.The annual payment under the lease will be $2,468.The first payment will be at the end of the current year and all subsequent payments will be made at year-ends.If the discount rate is 5%,the present value of the lease payments is closest to:

• A) $12,528
• B) $14,103
• C) $14,808
• D) $11,050

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