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Calculate the interest rate implicit in the lease

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Reference no: EM133169966

Question - Lowe Ltd acquires a machine on a finance lease with the following details:

Cost of leased asset £14,000

Lease term 4 years

Annual rent payable in advance £4,000 each

Residual Value £nil

Expected economic life of asset 5 years

Inception date 1 January 2015

Financial year end 31 December

Required - Calculate the interest rate implicit in the lease.

Reference no: EM133169966

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