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Benning Manufacturing Company is negotiating with a customer for the lease of a large machine manufactured...

Benning Manufacturing Company is negotiating with a customer for the lease of a large machine manufactured by Benning. The machine has a cash price of $960,000. Benning wants to be reimbursed for financing the machine at a 7% annual interest rate. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)

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3. Determine the required lease payment if the first of 10 annual payments will be made immediately and Benning will be able to sell the machine to another customer for $66,000 at the end of the 10-year lease.

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Answer #1

Benning--manufacturing company is Rea3 Detomine Requised tease Payment ff the Fistof 10 Annual payment wll be made immediately. & enning will be able to sell the machine 10 anothex customesfo 66C0O end of 1O ear lease -- ExPl anaHom: PVAp = (Annuity Amount X Annuity fa (font pvOf Residual - Annuity Amoun mPVAD -PVof Residua Annuity factor 960,000- 3355 t.SIS23 F 123 316 Ans f] Annuity facto-use Table PVAD cpxesent value of hnDuaPVof Residual Residual → $ 66000 use Tableラ PV of $ 1 メ -) | PVOR Residual 는 G6000 X O-SO 835 LE 33551 2 Lease

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