Homework Answers
| Purchase Option | |
| Table or Calcular Function | PV of $1 |
| n= | 6 |
| i= | 5% |
| Present Value | |
| Amount be recovered (fair value) | $610,000.00 |
| Purchase Option ($150000X 0.746215) | -$111,932.25 |
| Amount be recovered through periodic lease payments | $498,067.75 |
| Lease Payment | |
| Table or Calcular Function | PVAD of $1 |
| n= | 6 |
| i= | 5% |
| Lease Payments | |
| Amount of fair value recovered each lease payment ($498068/5.32948) | $93,455.22 |
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