Question
Abbott Equipment leased a protein analyzer to Werner Chemical, Inc., on September 30, 2016. Abbott purchased the machine from NutraLabs, Inc., at a cost of
Abbott Equipment leased a protein analyzer to Werner Chemical, Inc., on September 30, 2016. Abbott purchased the machine from NutraLabs, Inc., at a cost of $6.25 million. The five-year lease agreement calls for Werner to make quarterly lease payments of $407,863, payable each September 30, December 31, March 31, June 30, with the first payment at September 30, 2016. Abbot's implicit interest rate is 8%. (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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