1. Firm A, a leasing company, has a finance lease contract with firm B. The lease has the following term. (5 marks)

• Firm A purchased the leased equipment for 500,000.
• Term of the lease: 5 years
• The expected unguaranteed residual value of the machine is $10,000.
• Periodic lease payment will be paid in advance.
• The lessee will return the equipment to the lessor at the end of the lease term.
• Firm A, a manufacturer, demands of 8% implicit interest rate.

1. According to the above lease term, calculate the required periodic lease payment from the lessee to the lessor. Show your calculation process.

2. Whats the interest revenue from the first year of the finance lease? Show the calculation process