Multiple Choice
State Repairs acquires equipment under a noncancelable lease at an annual rental of $45,000, payable in advance for five years. After five years, there is a bargain purchase option of $75,000. The appropriate interest rate is 12 percent. What is the total present value of the lease and the first year's interest expense?
A) $224,234 and $21,508
B) $224,234 and $26,908
C) $204,771 and $21,508
D) $204,771 and $19,173
Correct Answer:
Verified
Correct Answer:
Verified
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