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Kingbird Company is negotiating to lease a piece of equipment to Blossom, Inc. Blossom requests that the lease be for 9 years. The equipment has
Kingbird Company is negotiating to lease a piece of equipment to Blossom, Inc. Blossom requests that the lease be for years. The equipment has a useful life of years. Kingbird wants a guarantee that the residual value of the equipment at the end of the lease is at least $ Blossom agrees to guarantee a residual value of this amount though it expects the residual value of the equipment to be only $ at the end of the lease term.
If the fair value of the equipment at lease commencement is $ what would be the amount of the annual rental payments Kingbird demands of Blossom, assuming each payment will be made at the beginning of each year and Kingbird wishes to earn a rate of return on the lease of For calculation purposes, use decimal places as displayed in the factor table provided and round final answer to decimal places, eg
Click here to view factor tables.
Amount of equal annual lease payments
$
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