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- ABC leases a machine from Caterpillar for 3 years. Caterpillar manufactured the machine at a cost of $650,000, and it has a $1 million
- ABC leases a machine from Caterpillar for 3 years. Caterpillar manufactured the machine at a cost of $650,000, and it has a $1 million fair market value and 5-year useful life. Caterpillar charges 6% interest and estimates that the residual value after 3 years equals $300,000. Lease payments will have to be made at the beginning of each year. Compute the lease payment that Caterpillar will charge ABC.
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