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What is the fair value of the leased building

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Question - On January 1, year 1, Homeland Entity (HE) signed a 20-year lease contract for an office building. The lease contract calls for HE to make payments of $10,000 at the beginning of each year, with the first payment being made January 1, year 1. This lease qualifies as a financing lease. HE decides to use the present value technique to estimate the fair value of the leased office building. The appropriate interest rate to reflect the time value of money is 8%. What is the fair value of the leased building?

Reference no: EM132125714

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