Question 1 [9 points] For each of the three independent situations below, determine the amount of the annual rental payments. Each describes a nonoperating lease in which annual rental payments are payable at the beginning of each year. Each lease agreement contains an option that permits the lessee to acquire the leased asset at an option price sufficiently lower than the expected market value. Exercise of the option appears reasonably certain. Please make sure your final answer(s) are accurate to the nearest whole number. Situation 3 Lease term (years) 14 Lessor's rate of return 15% 14% 5% Fair market value of leased asset $350,000 5230,000 $430,000 Lessor's cost of leased asset $280,000 $430,000 $110,000 BPO: Option price $10,000 $20,000 $40,000 Exercisable at end of year: 3 4 a) Calculate the annual repayment for situation 1. Annual repayment for situation 1: $130,793 Marking: You have completed this part correctly. b) Calculate the annual repayment for situation 2. Annual repayment for situation 2: $65,678 Marking: You have completed this part correctly. c) Calculate the annual repayment for situation 3. Annual repayment for situation 3: $59,373