Question: 32. If the lease payment for the machine in Question above were made in advance, starting at the beginning of the first year of the

32. If the lease payment for the machine in Question above were made in advance, starting at the beginning of the first year of the contract, what would the size of such a payment now be as an equivalent annual cost? A. $71,455 B. $14,644 C. $15,533 D. $15,816

33. What is the under estimated capital cost of $800,000 asset after five CCA calculations of 30% declining balance, with the half-year rule? A. $0 B. $240,000 C. $163,268 D. $145,564

Solution:

34. If a machine costs $50,000, and $5,000 a year for the lessor to maintain and insure, what equivalent annual cost would serve as the basis of full-service lease payment for a six-year operating lease, paid in arrears if the lessor's cost of capital is 8%? A. $15,816 B. $73,114 C. $17,155 D. $55,000

DO NOT COPY FROM CHEGG I NEED A FULL EXPLANATION

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