E5-19 – Capital Assets
The City of Rochester signed a 30-year agreement with East Coast Real Estate, Inc. to lease a newly constructed building for city services. The city agrees to make an initial payment of $1,000,000 and annual payments of $809,375 for the next 29 years. Using an assumed borrowing rate of 6 percent, the present value of the lease payments is approximately $12,000,000. At the time the lease agreement is signed, the building had an appraised market value of $13 million and 更多
