Frances McNale is an employee who drives a 2019 Ford C-Max with a fair-market value of $29,500. The lease value is $7,750, according to Publication 15-b. If the car was available for 150 days during the year, what is the prorated annual lease percentage, using the lease-value rule? (Do not round intermediate
Calculations, only round ﬁnal answer to two decimal points.)

Question

Quizplus · Accepted Answer

The prorated annual lease percentage using the lease-value rule is calculated by dividing the lease value by the fair-market value and multiplying by the number of days the car is available for use during the year.

Prorated annual lease percentage = (lease value / fair-market value) x (number of days car is available)

Plugging in the given values:

Prorated annual lease percentage = ($7,750 / $29,500) x 150 days 
= 0.2627 x 150 days 
= 39.41%

Rounding to two decimal places gives the answer of 41.10%, which is option C.

Frances McNale Is an Employee Who Drives a 2019 Ford