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How to fix payment lease
greetings the purpose of this video is to help you compute in two different ways the present value of the future minimum lease payments in this case you have Boeing which is a manufacturer of large jumbo jets leasing a 777 - 200 er - icelandair at a minimum monthly lease payment of three million dollars per month for 10 years after which Iceland air must return the plane to Boeing when is expected to be worth 10 million and Ill add a little thing here when it has to be 10 million meaning if when they return the jet its not worth 10 million Iceland air would have to come up with the difference in cash so were gonna treat this 10 million as a cash inflow to Boeing at the end of the 10 year life assuming Boeing requires a 10% annual rate of return compounded monthly on its leased planes thats its discount rate what is the present value of these minimum lease payments okay so lets do it the fast rate the present value were trying to figure that out the rate is 10 percent Ill make a
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