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Business, 16.06.2021 01:00 ciara180

Shamrock AG leases an automobile with a fair value of €14,169 from Simon Motors, on the following terms. 1. Non-cancelable term of 50 months. 2. Rental of €300 per month (at the beginning of each month). (The present value at 0.5% per month is €13,309.) 3. Shamrock guarantees a residual value of €1,250 (the present value at 0.5% per month is €584). Shamrock expects the probable residual value to be €1,250 at the end of the lease term. 4. Estimated economic life of the automobile is 60 months. 5. Shamrock’s incremental borrowing rate is 6% a year (0.5% a month). Simon’s implicit rate is unknown. Click here to view factor tables. (For calculation purposes, use 5 decimal places as displayed in the factor table provided.) (a) What is the present value of the lease payments to determine the lease liability? (Round answer to 0 decimmal)

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Shamrock AG leases an automobile with a fair value of €14,169 from Simon Motors, on the following te...
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