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You enter into a leasing arrangement for office space. The lease has a non-cancellable five-year term and requires monthly payments of $8,500, starting in one
You enter into a leasing arrangement for office space. The lease has a non-cancellable five-year term and requires monthly payments of $8,500, starting in one month from today. In order to prepare your financial statements, you are tasked to calculate both the total sum of future obligations as well as the present value of future obligations according to the lease. You determine that the appropriate discount rate to use is 5% p.a. What is the difference between the sum and the present value of those lease payments
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