6-33 (Algo) Present value calculation-financing lease LO 6-8, Appendix LO 6-10 Renter Company acquired the use of a machine by agreeing to pay the manufacturer of the machine $900 per year for 17 years. At the time the lease was signed, the interest rate for a 17-year loan was 10%. Table 6-5. Note: Use appropriate factor from the table provided. Required: a. Calculate the amount that Renter Company could have paid at the beginning of the lease to buy the machine outright. b. What causes the difference between the amount you calculated in part a and the total of $15,300 ($900 per year for 17 years) that Renter Company will pay under the terms of the lease? c. What is the appropriate amount of cost to be reported in Renter Company's balance sheet (at the time the lease was signed) with respect to this asset? Complete this question by entering your answers in the tabs below. Required A Required B Required C Calculate the amount that Renter Company could have paid at the beginning of the lease to buy the machine outright. Note: Round your answer to 2 decimal places. Amount Required A Required B > Complete this question by entering your answers in the tabs below. Required A Required B Required C What causes the difference between the amount you calculated in part a and the total of $15,300 ($900 per year for 17 years) that Renter Company will pay under the terms of the lease? The difference between the total amount paid and the present value of the lease payments is < Required A Required C > Complete this question by entering your answers in the tabs below. Required A Required B Required C What is the appropriate amount of cost to be reported in Renter Company's balance sheet (at the time the lease was signed) with respect to this asset? Note: Round your answer to 2 decimal places. Amount < Required B Required C Table 6-5: Factors for Calculating the Present Value of an Annuity of $1 Number of Periods Discount Rate 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% 1 0.980 0.9615 0.9434 0.9259 0.9091 0.8929 0.8772 0.8621 0.8475 0.8333 2 1.942 1.8861 1.8334 1.7833 1.7355 1.6901 1.6467 1.6052 1.5656 1.5278 3 2.884 2.7751 2.6730 2.5771 2.4018 2.4869 2.3216 2.2459 2.1743 2.1065 4 3.808 3.6299 3.4651 3.3121 3.1699 3.0373 2.9137 2.7982 2:6901 2.5887 5 4.713 4.4518 4.2124 3.9927 3.7908 3.6048 3.4331 3.2743 3.1272 2.9906 6 5.601 5.2421 4.9173 4.6229 4.3553 4.1114 3.8887 3.6847 3.4976 3.3255 7 6.472 6.0021 5.5824 5.2064 4.8684 4.5638 4.2883 4.0386 3.8115 3.6046 8 7.325 6.7327 6.2098 5.7466 5.3349 4.9676. 4.6389 4.3436 4.0776 3.8372 9 8.162 7.4353 6.8017 6.2469 5.7590 5.32821 4.9464 4,6065 4.3030 4.0310 10 8.983 8.1109 7.3601 6.7101 6.1446 5.6502 5.2161 4.8332 4.4941 4.1925 11 9.787 8.7605 7.8869 7.1390 6.4951 5.9377 5.4527 5.0286 4.6560 4.3271 12 10.575 9.3851 8.3838 7.5361 6.8137 6.1944 5.6603 5.1971 4.7932 4.4392 13 11.348 9.9856 8.8527 7.9038 7.1034 6.4235 5.8424 5.3423 4.9095 4.5327 14 12.106 10.5631 9.2950 8.2442 7.3667 6.6282 6.0021 5.4675 5.0081 4.6106 15 12.849 11.1184 9.7122 8.5595 7.6061 6.8109 6.1422 5.5755 5.0916 4.6755 16 13.578 11.6523 10.1059 8.8514 7.8237 6.9740 6.2651 5.6685 5.1624 4.7296 17 14.292 12.1657 10.4773 9.1216 8.0216 7.1196 6.3729 5.7487 5.2223 4.7746 18 14.992 12.6593 10.8276 9.3719 8.2014 7.2497 6.4674 5.8178 5.2732 4.8122 19 15.678 13.1339 11.1581 9.6036 8.3649 7.3658 6.5504 5.8775 5.3162 4.8435 20 16.351 13.5903 11.4699 9.8181 8.5136 7.4694 6.6231 5.9288 5.3527 4.8696 21 17.011 14.0292 11.7641 10.0168 8.6487 7.5620 6.6870 5.9731 5.3837 4.8913 22 17.658 14.4511 12.0416 10.2007 8.7715 7.6446 6.7429 6.0113 5.4099 4.9094 23 18.292 14.8568 12.3034 10.3711 8.8832 7,7184 6.7921 6.0442 5.4321 4.9245 24 18.914 15.2470 12.5504 10.5288 8.9847 7.7843 6.8351 6.0726 5.4509 4.9371 25 19.523 15.6221 12.7834 10.6748 9.0770 7.8431 6.8729 6.0971 5.4669 4.9476 30 22.396 17.2920 13.7648 11.2578 9.4269 8.0552 7.0027 6.1772 5.5168 4.9789 35 24.999 18.6646 14.4982 11.6546 9.6442 8.1755 7.0700 6.2153 5.5386 4.9915 40 27.355 19.7928 15.0463 11.9246 9.7791 8.2438 7.1050 6.2335 5.5482 4.9966 45 29.490 20.7200 15.4558 12.1084 9.8628 8.2825 7.1232 6.2421 5.5523 4.9986 50 31.424 21.4822 15.7619 12.2335 9.9148 8.3045 7.1327 6.2463 5.5541 4.9995