lpha Corporation is preparing a contract to lease a machine from Beta Corporation for a period of
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Question:
lpha Corporation is preparing a contract to lease a machine from Beta Corporation for a period of 25 years. Alpha has an investment cost of $365,755 in the machine, which has a useful life of 25 years and no salvage value at the end of that time. Alpha is interested in earning an 11% return on its investment and has agreed to accept 25 equal rental payments at the end of each of the next 25 years.
Alpha Corporation has asked you to provide the amount of each of the 25 rental payments that will yield an 11% return on investment. You may use a financial calculator or Excel's PV function to complete the calculation.
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