Smart Industries leases equipment on January 1, 2016. The finance lease has an 11-year term, and an implicit rate of 5%. The equipment has a list price of $300,000 and the lease agreement requires a $20,000 down payment when the lease is signed plus 10 annual payments of $36,261.28 on December 31 of each year of the lease. After Smart Industries makes its payment on December 31, 2018, what is its remaining lease obligation (carrying value) for the equipment

Answer:

$234,364.37

Explanation:

Lease obligation = Present value of remaining Lease payment

Present Value Of An Annuity = C*[1-(1+i)^-n]/i]

Present Value of Annuity = $36261.28 * [1-(1+0.05)^-8 /0.05]  

Present Value of Annuity = $36261.28 * [1-(1.05)^-8 /0.05]    

Present Value of Annuity = $36261.28 * [(0.3232)] /0.05

Present Value of Annuity = $234,364.37

Hence, its remaining lease obligation (carrying value) for the equipment is $234,364.37

The Financial Calculator Company proposes to invest $12 million in a new calculator-making plant that will depreciate on a straight-line basis. Fixed costs are $3 million per year. A financial calculator costs $10 per unit to manufacture and sells for $30 per unit. If the plant lasts for four years and the cost of capital is 20 percent, what is the accounting break-even level of annual sales? (Assume no taxes.)

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Net working capital $

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Can we get this to 20 Answers?

Which describes a type of tax that people pay on more they earn?

A. Flat tax
B. Income tax
C. Purchase tax
D. Progressive tax

Apollo Inc. has an unfunded pension liability of $900 million that must be paid in 30 years. If the annual interest rate is 6% compounded semiannually, what is the present value?

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Target debt weight: 20 percent
Cost of equity: 15 percent
Cost of debt: 5 percent
Tax rate: 35 percent
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B) WACC = 8.45 percent
C) WACC = 13.00 percent

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a. True
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DangGGG

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(ID#19361)
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what are the three basic types of issues that arise in business finance?​