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Brief Exercise 21A-9 Marin Inc. wishes to lease machinery to Thiensville Company. Thiensville wants the machinery for 4 years, although it has a useful life
Brief Exercise 21A-9 Marin Inc. wishes to lease machinery to Thiensville Company. Thiensville wants the machinery for 4 years, although it has a useful life of 10 years. The machinery has a fair value at the commencement of the lease of $49,000, and Marin expects the machinery to have a residual value at the end of the lease term of $25,000. However, Thiensville does not guarantee any part of the residual value. Thiensville does expect that the residual value will be $47,000 instead of $25,000 What would be the amount of the annual rental payments Marin demands of Thiensville, assuming each payment will be made at the end of each year and Marin wishes to earn a rate of return on the lease of 6%? (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answer to o decimal places,e.g. 5,275.) Amount of equal annual lease payments Click if you would like to Show Work for this question: Open Show Work
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