Question 1: Lease payment (4 marks) QUESTION DATA: Elsa Manufacturing Ltd. agrees to lease equipment to Hans Co. on May 1, 2020. Elsa follows IFRS and Hans follows ASPE. The following information relates to the lease agreement: (1). The equipment's cost is $380,000 and the asset's fair value on May 1, 2020 is $456,000. (2). The lease agreement requires equal annual rental payments beginning May 1, 2020. (3). The lease payment will include executory costs of $2,000. (4). There are no abnormal risks associated with the collection of the lease payments from Hans Co. Also, there are no additional unreimbursable costs to be incurred in connection with the leased equipment. (5). The lease agreement states the implicit interest rate of 10%. Elsa does not know Han's incremental borrowing rate. (6). The equipment has an estimated economic life of 15 years. (7). The term of the lease is 6 years. (8). Hans Co. has the option to purchase the equipment for $38,000 upon the termination of the lease. This option is reasonably certain to be exercised. REQUIRED: Calculate the lease payment that Elsa Manufacturing Ltd, would require from Hans Co. Complete the blue boxes below for the specific variables and state in the conclusion the lease payment. Use either of the two excel functions discussed in class to solve for the lease payment. Round the lease payment to the nearest whole dollar REQUIRED: Calculate the lease payment that Elsa Manufacturing Ltd. would require from Hans Co. Complete the blue boxes below for the specific variables and state in the conclusion the lease payment. Use either of the two excel functions discussed in class to solve for the lease payment Round the lease payment to the nearest whole dollar! Variables required Rate = 5 n B 9 0 1 2 13 FV = Type = PV- 25 The lease payment Elsa Manufacturing would charge Hans Co. is: 26