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Blueberry Company signed a 5 years lease agreement on January 1, 2019. Annual payments are RO 40000 at the beginning of each year. At the
Blueberry Company signed a 5 years lease agreement on January 1, 2019. Annual payments are RO 40000 at the beginning of each year. At the end of the lease, the equipment will revert back to the lessor. The equipment has a useful life of 5 years with no residual value. At the time of the lease agreement, the Fair Value of the equipment is RO 170000, an interest rate of 10.5%, and straight-line depreciation are used. Answer the questions given based on the case and related to the topic in general. Calculate the interest payment for the base year or year 0 (refer Case Study 1) O a. RO 10354 b. RO 0 c. RO 13171 O d. None of the given options Calculate the payment made towards principal for the year 4 (refer Case Study 1) a. RO 36198.85 O b. RO 29646.29 O c. RO 32759.15 d. None of the given options Calculate the percentage (%) of the present value to the fair value of the lease (refer Case Study 1). a. None of the given options O b. 97.31% c. 93.17%
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