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On January 1, 2017, Vaughn Corporation signed a 3-year noncancelable lease for several computers. The terms of the lease called for Vaughn to make annual
On January 1, 2017, Vaughn Corporation signed a 3-year noncancelable lease for several computers. The terms of the lease called for Vaughn to make annual payments of $4,400 at the beginning of each year, starting January 1,2017. The computers have an estimatec useful life of 3 years and a $400 unguaranteed residual value. The computers revert back to the lessor at the end of the lease term. Vaughn uses the straight-line method of depreciation for all of its property, plant, and equipment. Vaughn's incremental borrowing rate is 11%, and the lessor's implicit rate is unknown. (a) Compute the present value of the minimum lease payments. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places es. 58,971.) Present Value
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