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

question 53

Multiple Choice

For the following lease,determine the minimum present value calculation for the lessor.
$$\begin{array} { | l | l | } \hline \text { Annual payment (due at end of year) } & \$ 30,000 \\\hline \text { Lease term } & 5 \\\hline \text { Incremental rate } & 10 \% \\\hline \text { Implicit rate (unknown to lessee) } & 8 \% \\\hline \text { Unguaranteed residual value } & 28,000 \\\hline\end{array}$$

• A)113,723
• B)119,781
• C)131,109
• D)138,838

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Definitions:

Adenine

One of the four nucleobase molecules used in forming nucleotides of the nucleic acids DNA and RNA; it pairs with thymine in DNA and with uracil in RNA.

Thymine

A nitrogenous base found in DNA, paired with adenine, and is one of the four nucleotide bases in DNA.

Nucleosomes

Fundamental subunits of chromatin, composed of a segment of DNA wound around a core of histone proteins, facilitating DNA packing in the cell nucleus.

Histones

Proteins that package and order DNA into structural units called nucleosomes, playing key roles in gene regulation.