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Sir, please tell me how you derive the answer for this question, I am stuck for hours trying to understand..
Lessee pays 5 payments of $120,000 annually in ADVANCE under year lease.
At end of 5 years, ownership will transfer to lessee for a nominal amount.
Incremental borrowing rate of lessee is 10.50%.
Interest rate implicit in lease is 10.05%.
Fair value machine is $500,000What are the finance charge & capital repayment using the ACTUARIAL Method?
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