You may solve the problems directly on the exam or you may attach paper or excel documents. Problems #1 (5 pts) For the lease situation described below, determine the appropriate lease classification by the lessee and explain the reason(s) why. Your response should include a YES/NO to each of the criteria as well as calculation if appropriate. Lease Term Lease Payment Asset's useful life. Asset's fair value.... ..4 years $30,000/year 6 years $114,000 .No Bargain purchase option? Annual Lease payments. Lessor's implicit rate (known by lessee). Lessee's incremental borrowing rate... End of year .6% .5%