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Global Ship Lease, Inc. is leasing a cargo ship to Parker Shipping. There is no guaranteed residual, but Global Ship Lease, Inc. originally determines
Global Ship Lease, Inc. is leasing a cargo ship to Parker Shipping. There is no guaranteed residual, but Global Ship Lease, Inc. originally determines an unguaranteed residual of $75,000, which it uses in calculating the annual lease payment. Later, Global Ship Lease determines that the unguaranteed residual will only be $50,000, which is the amount it uses in calculating the annual lease payment in its contract with Parker Shipping. Which of the following is true? OA. The decrease in the unguaranteed residual will increase the annual lease payment. B. The decrease in the unguaranteed residual will decrease the annual lease payment. OC. The decrease in the ungiaranteed residual will have no effect on the annual lease payment.
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