$1$

points

Return to questionItem $4$

Each of the four independent situations below describes a sales$-$type lease in which annual lease payments of $$18,500$ are payable at the beginning of each year. Each is a finance lease for the lessee.

Situation

$1234$

Lease term $($years$)3334$

Asset$$s useful life $($years$)3447$

Lessor$$s implicit rate $($known by lessee$)11\%11\%11\%11\%$

Residual value:

Guaranteed by lessee $ $0$ $ $7,400$ $ $3,700$ $$0$

Unguaranteed $ $0$ $ $0$ $ $3,700$ $ $7,400$

Purchase option:

After $($years$)$ none $233$

Exercise price $ $8,700$ $ $2,700$ $ $4,700$

Reasonably certain? no no yes

Note: Use tables, Excel, or a financial calculator. $($FV of $$1,$ PV of $$1,$ FVA of $$1,$ PVA of $$1,$ FVAD of $$1$ and PVAD of $$1)$

Determine the following amounts at the beginning of the lease:

Note: Round your final answers to nearest whole dollar.