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Z Limited is faced woth decision to purchase or acquire machine onlease. Cost of machine is 126965, the asset can be finance on loan with intrest @15 % and loan to be paid in 5 equal installement. Tax rate @40%-, the present value of cash flow on buying option is 87528. what should be annual lease rental to be charge by leasing comapny to match the loan option

April 10, 2020

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A company can obtain an assest on lease by paying 5 equal lease rental annual, this is paid at begining of every year. The leasing company desire to return 10% on gross value of asset. Tax rate 40%. Cost of capital 9%cost of asset 761790, calculate the leasae rental payable by comapny

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Apple limited has decided to invest in earth moving equipments which cost 550000. the company can take it on lease of 7 years at 90000 pa payable in advance. Or it can borrow 6 years under straight line depreciation method. Asset useful life is 7 years, the terminal year asset will be sold for 40000, tax rate 30%, what will be amount contained in loan installement in 6th year

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