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28 Jul 2020
Cristiano Limited is interested in acquiring the use of a generator costing Rs. 800,000/-. It has two options: 1) To borrow the amount at18% per annum repayment in 5 equal annual installment at the end of each year OR 2) To take on lease the asset for a period of 5 years at the end of each year of Rs. 175,000/- The corporation tax rate is 35% and the depreciation is allowed on straight line method. The asset will have a salvage value of Rs. 180,000 at the end of the 5th year. Required: You are required to evaluate each source of financing and advice the company about lease or buy decision
Cristiano Limited is interested in acquiring the use of a generator costing Rs. 800,000/-. It has two options: 1) To borrow the amount at18% per annum repayment in 5 equal annual installment at the end of each year OR 2) To take on lease the asset for a period of 5 years at the end of each year of Rs. 175,000/- The corporation tax rate is 35% and the depreciation is allowed on straight line method. The asset will have a salvage value of Rs. 180,000 at the end of the 5th year. Required: You are required to evaluate each source of financing and advice the company about lease or buy decision
muhammed7877777Lv10
21 Apr 2024