The lease term is four years,while the economic life of the asset is six years.The annual lease payment is $10,000 at the beginning of each year,and the appropriate discount rate is 7 percent.There is no salvage value at the end of the lease.The lessee uses the straight-line depreciation method.
A) Estimate the value of the asset.
B) Estimate the change in NI, CFO, and CFF at the end of the first year if a firm decides to enter into a lease agreement.

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The Answer of The lease term is four years,while the economic life of the asset is six years.The annual lease payment is $10,000 at the beginning of each year,and the appropriate discount rate is 7 percent.There is no salvage value at the end of the lease.The lessee uses the straight-line depreciation method.

The Lease Term Is Four Years,while the Economic Life of the Asset