Exhibit 20-4 On January 1, 2016, Average Leasing Company entered into a direct financing lease with a lessee, Lenny Company. The lease agreement calls for five equal annual payments of $75,000 at the beginning of each year with the first payment due on January 1, 2016. The leased property has an estimated residual value of $10,000, which Lenny does not guarantee. The property remains the property
of Average at the end of the lease term. Average desires a 12% rate of return. Present value factors for a 12% interest rate are as follows: Present value of $1 for n = 1 0.892857 Present value of $1 for n = 5 0.567427 Present value of an ordinary annuity for n = 5 3.604776 Present value of an annuity due for n = 5 4.037349 ? Refer to Exhibit 20-4. What is the amount of the credit to Unearned Interest: Leases to be recorded by Average Leasing on January 1, 2016 (round the answer to the nearest dollar)?
A) $82,199
B) $66,525
C) $72,199
D) $76,525
D
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What is the basic principle of Vroom’s theory?
What will be an ideal response?
Any part of the ______ chain can be outsourced, including product design, raw material or component supply, manufacturing or assembly, logistics, distribution, marketing, sales, service, human resources, or other activities.
Fill in the blank(s) with the appropriate word(s).
Luca was a professional classical guitar player until a motorcycle accident left him disabled
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