5.. Wildhorse Inc. manufactures an X-ray machine with an estimated life of 12 years and leases it to Chambers Medical Center for a period of 10 years. The normal selling price of the machine is $536,107, and its guaranteed residual value at the end of the non-cancelable lease term is estimated to be $13,500. The hospital will pay rents of $65,100 at the beginning of each year. Wildhorse incurred costs of $274,000 in manufacturing the machine and $13,600 in legal fees directly related to the signing of the lease. Wildhorse has determined that the collectibility of the lease payments is probable and that the implicit interest rate is 5%. Discuss the nature of this lease in relation to the lessor. The nature of this lease in relation to the lessor is . Compute the amount of each of the following items. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answers to 0 decimal places, e.g. 5,275.) (1) Lease receivable at commencement of the lease $ (2) Sales price $ (3) Cost of sales $ Save for Later Attempts: 0 of 1 used Submit Answer (b) The parts of this question must be completed in order. This part will be available when you complete the part above. (c) The parts of this question must be completed in order. This part will be available when you complete the part above.
5.. Wildhorse Inc. manufactures an X-ray machine with an estimated life of 12 years and leases it to Chambers Medical Center for a period of 10 years. The normal selling price of the machine is $536,107, and its guaranteed residual value at the end of the non-cancelable lease term is estimated to be $13,500. The hospital will pay rents of $65,100 at the beginning of each year. Wildhorse incurred costs of $274,000 in manufacturing the machine and $13,600 in legal fees directly related to the signing of the lease. Wildhorse has determined that the collectibility of the lease payments is probable and that the implicit interest rate is 5%. Discuss the nature of this lease in relation to the lessor. The nature of this lease in relation to the lessor is . Compute the amount of each of the following items. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answers to 0 decimal places, e.g. 5,275.) (1) Lease receivable at commencement of the lease $ (2) Sales price $ (3) Cost of sales $ Save for Later Attempts: 0 of 1 used Submit Answer (b) The parts of this question must be completed in order. This part will be available when you complete the part above. (c) The parts of this question must be completed in order. This part will be available when you complete the part above.
Chapter19: Lease And Intermediate-term Financing
Section: Chapter Questions
Problem 2P
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5..
Wildhorse Inc. manufactures an X-ray machine with an estimated life of 12 years and leases it to Chambers Medical Center for a period of 10 years. The normal selling price of the machine is $536,107, and its guaranteed residual value at the end of the non-cancelable lease term is estimated to be $13,500. The hospital will pay rents of $65,100 at the beginning of each year. Wildhorse incurred costs of $274,000 in manufacturing the machine and $13,600 in legal fees directly related to the signing of the lease. Wildhorse has determined that the collectibility of the lease payments is probable and that the implicit interest rate is 5%.
Discuss the nature of this lease in relation to the lessor.
The nature of this lease in relation to the lessor is .
Compute the amount of each of the following items. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answers to 0 decimal places, e.g. 5,275.)
The nature of this lease in relation to the lessor is .
Compute the amount of each of the following items. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answers to 0 decimal places, e.g. 5,275.)
(1) | Lease receivable at commencement of the lease |
$
|
||
(2) | Sales price |
$
|
||
(3) | Cost of sales |
$
|
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(b)
The parts of this question must be completed in order. This part will be available when you complete the part above.(c)
The parts of this question must be completed in order. This part will be available when you complete the part above.
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