Halvane, a lessor, leases a medical scanner to a clinic under a finance lease. The lease provides for 4 annual payments of 80,000, in advance; the first one is received at the commencement date. At the end of the lease, the expected residual value of 42,000 is split into a portion guaranteed by the clinic of 30,000 and an unguaranteed portion of 12,000. The interest rate implicit in the lease is 5 %. Compute the net investment at the commencement date, after receipt of the first payment, rounded to the nearest euro.
- Annual payment in advance
- 80,000
- Number of annual payments
- 4
- Residual value guaranteed by the lessee
- 30,000
- Unguaranteed residual value
- 12,000
- Interest rate implicit in the lease
- 5 %