Answer the Questions as per the instructions.
For this week's Case, you have an issue dealing with an international lease. The lease is from the U.S. parent company, to a UK subsidiary. The U.S. parent company classifies the lease as an operating lease; the UK company doesn't know how to classify the lease. The particulars (as the Brits would state), are as follows:
Lease length 15 years.
Incremental borrowing rate=10%.
Useful life 30 years.
Payment =$10000
Residual value =$1000
No renewal of lease available.