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Swanson Corporation Is Leasing a Machine from Gray, Inc

Question 85

Multiple Choice

Swanson Corporation is leasing a machine from Gray, Inc. Swanson's incremental borrowing rate is 13%. The prime rate of interest is currently 7%. Gray's implicit rate in the lease is 9%; Swanson does not know this rate. At what interest rate should the minimum lease payments be computed?


A) 7%
B) 9%
C) 11%
D) 13%

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