Lease Question Help, Please

I was confused about the answer because the feedback pdf for this question said:

"The present value of the lease is $360,477.62.

(n = 5, I = 12%, PMT = $100,000)

12% of the original PV is $43,257.31 and represents the interest component of the payment in the first year. The difference between the annual payment and the interest is the amortization of the lease obligation and is included in cash flow from financing. $100,000 - 43,257.31 = $56,742.69.

Depreciation is $360,477.62 / 5 or $72,095.52, so the total reduction in pretax income would be interest plus depreciation or $115,352.83. Cash flow from operations would be reduced by the amount of the interest only because the depreciation would be added back to determine cash flow from operations."

...... So is the answer "B: cash flow from financing is $56,742"?
 
even though i've already gone through all the stalla FSA questions

i think i should do leases again



Edited 1 time(s). Last edit at Thursday, June 5, 2008 at 08:42PM by supersharpshooter.
 
schweser's format is to answer each question in the front of each SS...
what's stalla's format?
 
man i'm looking ahead of myself -_- lets pass lets pass lets pass :):):):):)
 
you pick a reading and go through all the questions for that reading, receiving immediate feedback about why your answer is right and each other answer is wrong

you can also make tests

i don't use their built in reading materials that much



Edited 1 time(s). Last edit at Thursday, June 5, 2008 at 08:44PM by supersharpshooter.
 
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