Lessor amount to be amortized, Finance Basics

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Lessor amount to be amortized

Problem:

Contech (lessee) wishes to lease a printing press valued at $60,000 from Wrenn Capital (lessor) for a period of 4 years. Wrenn expects to depreciate the asset on a straight-line basis to a salvage value of $0. Actual salvage value is expected to be $8,000 at the end of 4 years. If Wrenn requires a 12 percent after-tax rate of return on the lease, what is the lessor's amount to be amortized? Assume Wrenn's marginal tax rate is 40%.

A. $60,000

B. $38,725

C. $41,778

D. $36,690

Note: Explain in detail.

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Finance Basics: Lessor amount to be amortized

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Finance Basics: Lessor amount to be amortized

Reference No:- TGS0877735

Have a Question? (oR Write a Review)

Recent Questions Asked Finance Basics

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Q : Status of the marketing research function

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Request for Solution File

Ask an Expert for Answer!!

Finance Basics: Lessor amount to be amortized

Reference No:- TGS0877735

Recent Questions Asked Finance Basics

Q : Annual rate of return

Q : Status of the marketing research function

Q : Except for the correlation coefficient

Q : What is the apr and ear of your investment

Q : Lessor amount to be amortized

Q : Marketing research process

Q : Experimental method of collecting primary data

Q : Determine the cost of the cash discounts

Q : Essex''s average cash balance

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