A Firm Leases Equipment Under a Capital Lease (Analogous to an Installment

Multiple Choice

A firm leases equipment under a capital lease (analogous to an installment purchase) that calls for twelve semiannual payments of $39,014.40. The first payment is due at the inception of the lease. The annual rate on the lease is 6%. What is the value of the leased asset at inception of the lease?

A) $388,349.
B) $400,000.
C) $454,128.
D) $440,082.PVAD = $39,014.40 x 10.25262 * = $400,000 *PVAD of $1: n=12; i=3%