Computing lessor-s amount to be amortized


Q1) Contech (lessee) wants to lease printing press valued at $60,000 from Wrenn Capital (lessor) for period of 4 years. Wrenn expects to depreciate asset on a straight-line basis to salvage value of $0. Actual salvage value is expected to be $8,000 at the ending of 4 years. If Wrenn needs a 12 percent after-tax rate of return on lease, compute lessor's amount to be amortized? Suppose Wrenn's marginal tax rate is 40%.

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Accounting Basics: Computing lessor-s amount to be amortized
Reference No:- TGS019969

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