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Novak Corporation purchased a piece of equipment for $91,000. Novak wanted to lease out the equipment to a customer for 8 years, at the end
Novak Corporation purchased a piece of equipment for $91,000. Novak wanted to lease out the equipment to a customer for 8 years, at the end of which time the customer could purchase the equipment for $4,800 (at a time when its fair value would be $5,760). Annual payments on the lease would be due at the beginning of each year. In order to earn a 8% return, what minimum lease payments should Novak charge its customer for this equipment lease?
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