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Larkspur Inc. wishes to lease machinery to Crane Company. Crane wants the machinery for 4 years, although it has a useful life of 1 0
Larkspur Inc. wishes to lease machinery to Crane Company. Crane wants the machinery for years, although it has a useful life of years. The machinery has a fair value at the commencement of the lease of $ and Larkspur expects the machinery to have a residual value at the end of the lease term of $ However, Crane does not guarantee any part of the residual value. Crane does expect that the residual value will be $ instead of $
What would be the amount of the annual rental payments Larkspur dernands of Crane, assuming each payment will be made at the end of each year and Larkspur 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
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Amount of equal annual lease payments
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