Q$2$

A leased out a plant to B on following terms:

Down Payment RM$10,000$

Annual Payments $($at end of year$)$ RM$20,000$

Lease Term $=5$ years

Interest rate implicit in the lease $10\%$ per annum

Residual value guaranteed by B $=$RM$10,000$

Estimated residual value at end of lease term RM$15,000$

When the annual discount rate is $10\%,$ the present value of RM$1$ annuity payable at the end of years $15$ is $3\mathrm{.}791.$ The PV of single ringgit at year end in year $5$ is$0\mathrm{.}621.$

Required:

Calculate lease receivable amount for lessor, A$.$