Business, 19.05.2021 18:50 veronica25681

Metcalf Company leases a machine from Vollmer Corp. under an agreement which meets the criteria to be a finance lease for Metcalf. The six-year lease requires payment of $170,000 at the beginning of each year, including $25,000 per year for maintenance, insurance, and taxes. The incremental borrowing rate for the lessee is 10%; the lessor's implicit rate is 8% and is known by the lessee. The present value of an annuity due of 1 for six years at 10% is 4.79079. The present value of an annuity due of 1 for six years at 8% is 4.99271. Metcalf should record the leased asset at: a. $848,760
b. $814,435
c. $723,943
d. $694,665

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Metcalf Company leases a machine from Vollmer Corp. under an agreement which meets the criteria to b...

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