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Question: multiple choice question 54 on january 1 2018 sandhill inc...

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Multiple Choice Question 54 On January 1, 2018, Sandhill, Inc. signs a 10-year noncancelable lease agreement to lease a storage building from Holt Warehouse Companry. Collectibility of lease payments is reasonably predictable and no important uncertainties surround the amount of costs yet to be incurred by the lessor. The following information pertains to this lease agreement (a) The agreement requires equal rental payments at the beginning each year. (b) The fair value of the building on January 1, 2018 is $5800000; howeves, the book value to Holt is $4750000. (c) The building has an estimated economic life of 10 years, with no residual value. Sandhill depreciates similar buildings on the straight line method. (d) At the termination of the lease, the title to the building will be transferred to the lessee. (e Sandhits i ren ental borrowing rate is 10% per yeat. Holt wareh sed set thea (f) The yearly rental payment includes $14600 of executery costs related to taxes on the property al rental to insure a 8% rate of return. The implicit rate of the lessor is known by Sandhill. , Inc. Euture Value of Ordinary Annuity.ot 1.00000 1.00000 1.00000 1.00000 1.00000 2 2.05000 2.06000 2.08000 .10000 2.12000 3 3.15250 3.18360 3.24640 3.31000 3.37440 44.31013 4.37462 4.50611 4.64100 4.77933 5 5.52563 5.63709 5.86660 6.10510 6.35285 6 6.80193 6.97532 7.33592 7.71561 .11519 7 8.40 8.39384892280 9.40747 10.00901 89.54913 9.89747 10.63663 11-43589 12.29969 11.02656 11.4913212.48756 13.57948 14.77566 10 1257789 13.18079 14.48656 15.93743 17.54874 Period 5% 10% 12% 11.00000 1.000001.000 1.00000 1.0000o
2 1.95238 1.94340 1.92593 1.90909 1.89286 3 2.85941 2.83339 2.78326 2.73554 2.69005 4 3.72325 3.67301 3.577103.48685 3.40183 5 4.54595 4.46511 4.31213 4.16986 4.03735 65.32948 5.21236 4.992714.79079 4.60478 7 6.07569 5.91732 5.62288 535526 5.11141 8 6.78637 6.58238 6.20637 5.86842 5.56376 9 7.46321 7.20979 6.74664 6.33493 5.96764 10 8.10782 7.80169 7.24689 6.75902 6.32825 What is the amount of the minimum annual lease payment? (Rounded to the nearest dollar.) O $78574:3 $800343 O $814943 $220343
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