E6-17B (Computation of Amount of Rentals) Your client, Miller Leasing Company, is preparing a contract to lease a machine to Molinar Corporation for a period of 25 years.

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E6-17B (Computation of Amount of Rentals) Your client, Miller Leasing Company, is preparing a contract to lease a machine to Molinar Corporation for a period of 25 years. Miller has an investment cost of $250,000 in the machine, which has a useful life of 25 years and no salvage value at the end of that time. Your client is interested in earning a 10% return on its investment and has agreed to accept 25 equal rental payments at the end of each of the next 25 years.

Instructions

Provide Miller with the amount of each of the 25 rental payments that will yield a 10% return on investment.

    • 10 years ago
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