1) Smith & Jones has been asked by Levi Manufacturing to quote on a 4-year lease for a machine which costs $375,000. The equipment can be depreciated for tax purposes over 4 years.

The equipment has a residual value expected to be $15,000 to be received at the end of the lease period which is taxed at the corporate tax rate.

Other details:

Company's Cost of Capital 10%

Corporate Tax Rate 30%

All lease payments are received in advance, at the start of the year - (annuity due).

Required:

What is the ANNUAL LEASE PAYMENT that Smith and Jones should quote Levi Manufacturing?

2) Johnny Johnson commenced worked at the Jenson Laboratories on the 15^th June 1994. He is currently earning currently earning $76,500 per year.

Long service leave entitlement is calculated as 10 weeks leave after the first 10 years of service and 10 calendar days for every year worked in excess of 10 years (proportionate leave for partial year)

Required:

As at 31^st May 2017, calculate the amount of money owing to Johnny for his Long Service Leave entitlement.