Jamal Textile leases a machine from Farhan for 3 years. Jamal agrees to pay Rs100,000/month and 1% of sales in excess of Rs 10,000,000. Historically Jamal has had net sales in excess of Rs 10,000,000 every year and is forecasted to continue for the next 5 years. It is highly likely that Jamal will be making payments of Rs 100,000 every year.

What amount of Lease payment that should be used to record this lease?

Answer rating: 100% (QA)

To determine the lease payments to be used to record this lease we need to calculate the present val... View the full answer