International lease

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Reference no: EM13761423

Answer the Questions as per the instructions.

For this week's Case, you have an issue dealing with an international lease. The lease is from the U.S. parent company, to a UK subsidiary. The U.S. parent company classifies the lease as an operating lease; the UK company doesn't know how to classify the lease. The particulars (as the Brits would state), are as follows:

Lease length 15 years.

Incremental borrowing rate=10%.

Useful life 30 years.

Payment =$10000

Residual value =$1000

No renewal of lease available.

Reference no: EM13761423

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