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How much the present value of the lease payment

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Problem 1: On December 31, 2018, Burke Corporation signed a lease contract fora machine with a period of 5 years, irrevocably. Annual lease payments of $ 8,668 beginning December 31, 2018.The engine's economic life is 6 years and the residual value is $ 5,000.The machine is returned to the lessor at the end of the lease period. Burke uses the straight-line method for depreciation. Burke's incremental borrowing rate is 5%, and the implicit rate of the lessor is unknown. How much the present value of the lease payment?

a) $39,401
b) $39,402
c) $39,403
d) $39,404

Reference no: EM132731104

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