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Unformatted text preview: ............... Interest on leases ......................................................................................................... Total lease- related cost for Year 1 ...................................................................... $ 7,986.00 3,194.40 $11,180.40 (3) (1) $39,930 - $7,986 = $31,944 (2) $39,930 - $6,805.60 = $33,124.40 (3) To be contrasted to rental costs of $10,000 when no capitalization takes place. c. Year 1 2 3 4 5 d. Year 1 2 3 4 5 Payments of Interest and Principal Interest Payment of at 8% Principal 10,000 $3,194.40 $6,805.60 10,000 2,649.95 7,350.05 10,000 2,061.95 7,938.05 10,000 1,426.90 8,573.10 10,000 736.80 9,263.20 $50,000 $10,070.00 $39,930....
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This document was uploaded on 02/27/2014 for the course FMIS 3644 at University of Minnesota Duluth.

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