Business, 25.10.2019 18:43 sunshine52577oyeor9

Mccormick county agreed to acquire a new recreation equipment storage facility under a lease financing agreement. at the inception of the lease, a payment of $750,000 will be made; four additional annual lease payments, each in the amount of $750,000, are to be made at the end of each year, beginning late in the current year. the total amount to be paid under this lease is $3,750,000. the lease arrangements implied an annual interest rate of 6 percent. therefore, the present value of the lease at inception, including the initial payment, is $3,348,829. assume that the fair value of the building at the inception of the lease is $3,600,000.was this lease properly classified as a capital lease?

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