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Skysong Company leases an automobile with a fair value of $18,680 from John Simon Motors, Inc., on the following terms: 1. 2. 3. Non-cancelable term of 50 months. Rental of $380 per month (at the beginning of each month). (The present value at 0.5% per month is $16,859.) Skysong guarantees a residual value of $1,870 (the present value at 0.5% per month is $1,457). Skysong expects the probable residual value to be $1,870 at the end of the lease term. Estimated economic life of the automobile is 60 months. Skysong's incremental borrowing rate is 6% a year (0.5% a month). Simon's implicit rate is unknown. 4. 5. Click here to view factor tables. (For calculation purposes, use 5 decimal places as displayed in the factor table provided.) (g) * Your answer is incorrect. Suppose that instead of $1,870, Skysong expects the residual value to be only $500 (the guaranteed amount is still $1,870). How does the calculation of the present value of the lease payments change from part (b)? (Round answer to decimal places, eg. 5,275.) PV of lease payments $ 16859