Company is leasing production equipment where the estimated useful life of the equipment is $11$ years, and the lease term is $8$ years. As per the current market, the fair value of the equipment is $$14$ million, while the lease rentals are agreed to be $$2\mathrm{.}45$ million payable at the beginning of each year. If an appropriate discount rate is $12\mathrm{.}25\%,$ determine the nature of lease.

Answer rating: 100% (QA)

Answer Lease Classification Capital Lease or Operating Lease We can determine the nature of the leas... View the full answer