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Blossom Services Inc. accounts for the lease of a truck. The lease includes a residual value guarantee at the end of the lease term
Blossom Services Inc. accounts for the lease of a truck. The lease includes a residual value guarantee at the end of the lease term of $18,500. Blossom estimates that the likelihood that the residual value will be $18,500 has a 55% certainty. Blossom feels that there is a 30% chance that the residual value will be $11,100 and a 15% chance that it will be $9,800. Calculate the probability-weighted value of the residual guarantee that needs to be included in the measurement of the lease payments liability recorded by Blossom when the lease is signed. Probability-weighted expected value +A $
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