Calculate the present value of the lease payments

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Question - Montevallo Corporation leased equipment from Folio Company. The lease term is 10 years, requires payments of $30,000 at the end of each year, and contains a bargain purchase option. At the end of the lease, Montevallo has an option to pay $5,000 (which is significantly less than the estimated fair value at that time) to purchase the equipment. The lease agreement stipulates that Folio receive a rate of return of 5% each year. Calculate the present value of the lease payments. Round your answer to the nearest dollar.

Reference no: EM132865140

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