What would be the amount of the annual rental payments

Assignment Help Accounting Basics
Reference no: EM132725182

Marin Company is negotiating to lease a piece of equipment to MTBA, Inc. MTBA requests that the lease be for 9 years. The equipment has a useful life of 10 years. Marin wants a guarantee that the residual value of the equipment at the end of the lease is at least $6,000. MTBA agrees to guarantee a residual value of this amount though it expects the residual value of the equipment to be only $2,500 at the end of the lease term.

Problem 1: If the fair value of the equipment at lease commencement is $105,000, what would be the amount of the annual rental payments Marin demands of MTBA, assuming each payment will be made at the beginning of each year and Marin wishes to earn a rate of return on the lease of 10%? (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answer to 0 decimal places, e.g. 5,275.)

Reference no: EM132725182

Questions Cloud

Explain how they produce offspring without meiosis : Explain how they produce offspring without meiosis. What is the purpose of the release of clotting factors in an inflamed tissue?
What is the role of the thalamus : 1. What are the 3 major regions of the brain and the major regions of each?
Find and Evaluate What is the bond yield to maturity : The market price is $775 for a 13-year bond ($1,000 par value) that pays 11 percent annual interest. Find and Evaluate What is the bond yield to maturity?
What is the function of the pupil : 1. What is the function of the pupil? 2. What is the function of the humors/fluids of the eye?
What would be the amount of the annual rental payments : What would be the amount of the annual rental payments Marin demands of MTBA, assuming each payment will be made at the beginning of each year
Describe the function of the kidney : 2. Define afferent and efferent. How does the relationship between the afferent and efferent arterioles affect the production of urine?
How much is the annual depreciation of the equipment : A project proposal with a 5 years life requires a new capital equipment worth P 2,000,000. How much is the annual depreciation of the equipment?
Why is the two strands in the double helix : Why is the two strands in the double helix that are complementary to each other important to the function of DNA?
Find the percentage of respondents that drink coke : Draw a venn diagram to represent these result and find the percentage of respondents that drink coke,that drink pepsi and that drink neither

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd