What is the amount of each rent payment

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Question - ZAB Ltd. is a lessor leasing an asset with a fair value of $160,000. The lease term is for 7 years with quarterly payments at the beginning of each 3-month period. The implicit rate that the company uses to calculate lease payments is 5%. The incremental borrowing rate for the lessee is 3%. The asset has a bargain purchase option with a value of $16,000. What is the amount of each rent payment that the company will want to receive from its lessee for this asset?

Reference no: EM132879834

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