Ace Leasing acquires equipment and leases it to customers under long-term direct financing leases. Ace earns interest under these arrangements at a 6% annual rate. Ace leased a machine it purchased for $650,000 under an arrangement that specified annual payments beginning at the inception of the lease for six years. The lessee had the option to purchase the machine at the end of the lease term for $150,000 when it was expected to have a residual value of $210,000. (FV of $1, PV of $1, FVA of $1, PVA of $1,FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)Calculate the amount of the annual lease payments. Amount to be recovered $Bargain Purchase Option $Amount to be recovered through periodic lease payments $Lease Payment:Amount of fair value recovered each lease payment $

The computation is shown below:

The amount which is to be recovered is equal to the purchase amount i.e $650,000

The present value of bargain purchase option is

= $150,000 ×  Present value  factor at 6% for 6th period

= $150,000 × 0.704961

= $105,744

The amount to be recovers through periodic lease payment is

= $650,000 - $105,744

= $544,256

And, the annual lease payment is

=  Recovered amount through periodic lease payment ÷ Cumulative Present value factor for annuity due at 6% for 6 periods

= $544,256 ÷ 5.212364

= $104,416

answer; test-retest;

(i know i'm late but the answer's "things about yourself" because you want to list things you're capable of, why you want to open up the business, the amount of money you're putting into it,etc.) i'm guessing you take online school small business, the answers to the quizzes are all over quizlet. just look up your question and type quizlet after it and it'll pop up.