Solve the present value of the minimum lease payments

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On 1 July 2019, Mavis Ltd leased equipment from Perry Ltd. The term of the lease is 20 years and the implicit interest rate is 10 per cent. It is expected that the equipment will be scrapped at the end of the lease contract. The lease in non-cancellable and requires a lease payment of $300,000 at inception, with lease payments of $250,000 on 30 June each year. There is no residual payment required.

Problem 1: Calculate the present value of the minimum lease payments.

Reference no: EM132998279

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