Final answer:
In determining the present value of lease payments, three important concepts to consider are the equality of present value for the borrower and lender, the discounting of future expected payments, and the complexity of real-world situations.
Step-by-step explanation:
In determining the present value of the minimum lease payments, there are three important concepts to consider. In determining the present value of lease payments, three important concepts to consider are the equality of present value for the borrower and lender, the discounting of future expected payments, and the complexity of real-world situations.
The first is that the present value represents the amount of money that the borrower is receiving or will be repaid, which is the same for both the borrower and the lender. The second concept is that the present value is determined by discounting future expected payments using an interest rate. Lastly, the present value calculation may be more complex in real-world situations due to factors like changing interest rates and the riskiness of loan repayment.