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What will be the amount of the annual lease payments

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Reference no: EM133006072

Ivanhoe Limited is leasing a used Caterpillar excavator to Town Construction Ltd. The term of the lease is 8 years and the excavator will be owned by Town at the end of the lease if Town makes an additional payment to Ivanhoe of $35,500. The excavator cost Ivanhoe $520,000. Ivanhoe wants to charge a rate of 8% on the lease.

Problem 1: What will be the amount of the annual lease payments if the payments are made at the end of each of the next 8 years?

Problem 2: Calculate the annual lease payments if the payments are made at the end of each of the next 8 years?

Reference no: EM133006072

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