For the Following Lease,determine the Minimum Present Value Calculation for the Lessor

question 67

Multiple Choice

For the following lease,determine the minimum present value calculation for the lessor.
$$\begin{array} { | l | l | } \hline \text { Annual payment (due at end of year) } & \$ 22,000 \\\hline \text { Lease term } & 5 \\\hline \text { Incremental rate } & 10 \% \\\hline \text { Implicit rate (unknown to lessee) } & 8 \% \\\hline \text { Unguaranteed residual value } & 15,000 \\\hline\end{array}$$

• A)83,400
• B)92,711
• C)98,048
• D)102,304

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Definitions:

Conservation

The act of preserving, protecting, or restoring natural environments, cultural heritage, and other important assets from loss or damage.

Egocentrism

The cognitive inability to differentiate between one's own perspective and another person's perspective, often seen in early childhood development.

Attachment

An emotional tie with another person; shown in young children by their seeking closeness to their caregiver and showing distress on separation.

Adaptive Value

The extent to which a trait or behavior increases the survival and reproductive success of an organism in its environment.