5 years of monthly payments, total monthly payment: $11,433, interest rate if we had borrowed money from our bank: 5%

Equipment purchase price: $632,3745; however, opening lease balance is 578,880, so I’m not sure if that means they assume the asset has a value of $53,494 at the end of the lease. I need to figure out whether this loan means the capital lease criteria of PV of min lease pmt is >90% of leased property’s fair value. ]]>

How do I calculate the PV of MLP if there is a residual value on the asset?

Thank you!

]]>I’m having a hard time trying to solve this, any help??

Lessor leases a machine having a 3-year life to Lessee for a 3-year lease period. The cost to Lessor was $20,000; the selling price is $25,000. The annual rentals begin immediately on January 1, 19A, and Lessor’s two conditions have been set.

Lessor’s target rate of return is 10% and this rate is known to Lessee. However Lessee’s own incremental rate is 12%. ]]>

{Excel Formula: =PMT(9%, 50, $50,000)}

Now, suppose the investor is still expecting the same annual cash flow from the land, i.e., $4,561.34/-, so he will be willing to sell it @ $49,538.49/-.

{Excel Formula: =PV(9%, 44, $4,561.34)}