The Following Are Some of the Characteristics of an Asset

The following are some of the characteristics of an asset available for lease:
$$\begin{array} { | l | l | } \hline \text { Fair value of leased asset } & 38,000 \\\hline \text { Useful life } & 10 \text { years } \\\hline \text { Lease term } & 7 \text { years } \\\hline \text { Payment frequency } & \text { Annual } \\\hline \text { Payment timing } & \text { Beginning of year } \\\hline \text { Guaranteed residual value } & 10,000 \\\hline \text { Interest rate implicit in lease (not known to lessee) } & 10 \% \\\hline \text { Lessee's incremental borrowing rate } & 8 \% \\\hline\end{array}$$ Requirements:
a. Determine the amount of lease payment that the lessor would require to lease the asset.
b. Compute the present value of minimum lease payments for the lessee.