Guys, again from the 32 sample questions…apologies and it will be the last query I ask today…i just don’t seem to be getting answer A… Despite going back over the text, I am getting slightly confused over the interest lease aspect…thanks again! ------------------------------------------------------------------------------------------------------------------ 16. An analyst gathered the following information about the new capital lease obligation a company made at the beginning of the year: Annual end of year payments $16,000 Term of the lease 10 years Appropriate discount rate 10% Depreciation method Straight-line Salvage assumption Zero salvage value In the first year of the lease, the cash flow from financing section of the lessee company’s statement of cash flows will contain a lease-related cash outflow that is closest to: A. $6,169. B. $9,831. C. $14,400. D. $16,000.
This had been previously discussed: http://www.analystforum.com/phorums/read.php?11,835854,835854#msg-835854
Many Thanks!