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ISBN:9780073379593 Case 27-2: Rock Creek Golf Club Q2: Assume that Salesperson B's company also would be willing to sell the carts outright at $2,240 per

ISBN:9780073379593 Case 27-2: Rock Creek Golf Club

Q2: Assume that Salesperson B's company also would be willing to sell the carts outright at $2,240 per cart. Given the proposed lease terms, and assuming the lease is outstanding for five years, what interest rate is implicit in the lease? (Ignore tax impacts to the leasing company when calculating this implicit rate) Why is this implicit rate different from the 8% that RCGC may have to pay to borrow the funds needed to purchase the carts?

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