Listed below are several terms and phrases associated with leases

E 15-25 Concepts; terminology

Listed below are several terms and phrases associated with leases. Pair each item from List A with the item from List B (by letter) that is most appropriately associated with it.

List A
___ 1. Effective rate times balance.
___ 2. Realization principle.
___ 3. Minimum lease payments plus unguaranteed residual value.
___ 4. Periodic lease payments plus lessee-guaranteed residual value.
___ 5. PV of minimum lease payments plus PV of unguaranteed residual value.
___ 6. Initial direct costs.
___ 7. Rent revenue.
___ 8. Bargain purchase option.
___ 9. Leasehold improvements.
___10. Cash to satisfy residual value guarantee.
___11. Capital lease expense.
___12. Deducted in lessor’s computation of lease payments.
___13. Title transfers to lessee.
___14. Contingent rentals.
___15. Lease payments plus lessee-guaranteed and third-part-guaranteed residual value.

List B
a. PV of BPO price.
b. Lessor’s net investment.
c. Lessor’s gross investment.
d. Operating lease.
e. Depreciable assets.
f. Loss to lessee.
g. Executory costs.
h. Depreciation longer than lessee term.
i. Disclosure only.
j. Interest expense.
k. Additional lessor conditions.
l. Lessee’s minimum lease payments.
m. Purchase price less than fair value.
n. Sales-type lease selling expense.
o. Lessor’s minimum lease payments.

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Draw the activity-on-node (AON) project network associated with the following activities for Dave Carhart’s consulting company project

Problem 3.3 Draw the activity-on-node (AON) project network associated with the following activities for Dave Carhart’s consulting company project. How long should it take Dave and his team to complete this project? What are the critical path activities?

Activity Immediate Predecessor Days
A - 3
B A 4
C A 6
D B 6
E B 4
F C 4
G D 6
H E,F 8


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The following is a table of activities associated with a project at Bill Figg Enterprises, their durations and what activities each must precede

Problem 3.15 The following is a table of activities associated with a project at Bill Figg Enterprises, their durations and what activities each must precede:

ACTIVITY DURATION (WEEKS) PRECEDES
A (START) 1 B,C
B 1 E
C 4 F
E 2 F
F(END) 2 -

a) Draw an AON diagram of the project, including activity durations.
c) What is the project duration (in weeks)?
d) What is the slack (in weeks) associated with any and all noncritical paths through the project?


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What are the advantages and disadvantages associated with the unadjusted rate of return method for evaluating capital investments

21. What are the advantages and disadvantages associated with the unadjusted rate of return method for evaluating capital investments?


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Match the statement with the term most directly associated with it

DO IT! 9-4 Match the statement with the term most directly associated with it.

Goodwill Amortization
Intangible assets Franchise
Research and development costs

1. Rights, privileges, and competitive advantages that result from the ownership of long-lived assets that do not possess physical substance.
2. The allocation of the cost of an intangible asset to expense in a rational and systematic manner.
3. A right to sell certain products or services, or use certain trademarks or trade names within a designated geographic area.
4. Costs incurred by a company that often lead to patents or new products. These costs must be expensed as incurred.
5. The excess of the cost of a company over the fair market value of the net assets acquired.

Click here for the solution: Match the statement with the term most directly associated with it