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

question 89

Multiple Choice

For the following lease,determine the minimum present value calculation for the lessee.
$$\begin{array} { | l | l | } \hline \text { Annual payment (due at end of year) } & \$ 25,000 \\\hline \text { Lease term } & 5 \\\hline \text { Incremental rate } & \% \% \\\hline \text { Implicit rate (known to lessee) } & 6 \% \\\hline \text { Executory costs } & 2,000 \\\hline\end{array}$$

• A)94,305
• B)96,884
• C)102,505
• D)105,309

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Definitions:

Descartes

A French philosopher, scientist, and mathematician, known as the father of modern philosophy, who famously declared, "I think, therefore I am."

Plato

An ancient Greek philosopher who founded the Academy in Athens and is a pivotal figure in the development of Western philosophy, especially in terms of metaphysics, epistemology, and ethics.

Rousseau

Jean-Jacques Rousseau, an 18th-century philosopher known for his influence on the Enlightenment in France and across Europe.

State of Nature

A philosophical concept describing the hypothetical condition of humanity before the establishment of society and laws.