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I need help solving for the new PV of lease payments. The other portions should all be correct. Exercise 21A-3 a-g Sage Hill Company leases
I need help solving for the new PV of lease payments. The other portions should all be correct.
Exercise 21A-3 a-g Sage Hill Company leases an automobile with a fair value of $12,257 from John Simon Motors, Inc., on the following terms: 1. Non-cancelable term of 50 months. 2. Rental of $250 per month (at the beginning of each month). (The present value at 0.5% per month is $11,091.) 3. Sage Hill guarantees a residual value of $1,190 (the present value at 0.5% per month is $927). Delaney expects the probable residual value to be $1,190 at the end of the lease term. Estimated economic life of the automobile is 60 months. Sage Hill's incremental borrowing rate is 6% a year (0.5% a month), Simon's implicit rate is unknown. 4. 5. Click here to view the factor table (For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Your answer is correct. What is the nature of this lease to Sage Hill? The nature of this lease is a/an leaseStep by Step Solution
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