Airtel Company wants to acquire an equipment worth Kshs. 80,000 Kuber Finance Company offers a hire purchase
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Question:
Airtel Company wants to acquire an equipment worth Kshs. 80,000 Kuber Finance Company offers a hire purchase financing to Airtel Company. The hire purchase installments will be paid annually for eight years and Kuber will calculate interest at a flat rate of 14%
Required:
i. Calculate the interest distribution over the eight years using the sum of years digit (SYD) approach
(7mks)
ii. Calculate Kuber's Internal Rate of Return (IRR) for financing Airtel
company
(8mks)
Related Book For
Taxation Of Individuals And Business Entities 2015
ISBN: 9780077862367
6th Edition
Authors: Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver
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