Lindon Processing Company has been taking bids for four new processors. Martin Steel Goldbaum Equipment has offered to sell them a processor for $29,000 each. In addition, Martin would finance the transaction through a capital lease over the expected ten-year life of the processor with no money down. No mention of the size of the required year-end lease payments has been made yet, but Lindon knows that Martin will expect an eight percent return on the lease arrangement. Assume that Lindon accepts this option when answering the following questions. (Show detailed calculations.)

a. What will be the amount of each annual year-end lease payment?

b. What amount will Lindon capitalize as an asset on its balance sheet for the processors and for the lease obligation?

c. What total interest amount will Lindon pay over the life of the lease for financing?

d. What portion of the first payment will be attributable to interest?