Heavy machinery at a project site is purchased on lease. The annual rent for this machinery payable

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Heavy machinery at a project site is purchased on lease. The annual rent for this machinery payable to the leasing company is Rs.9,00,000/-, payable in 3 equal installments in a year. The effective life of the machinery is assumed to be 5 years.

a. If the bank interest rate is assumed to be 12%, what will be the present value of the rent payable in the 5^th year. Write down only the expression. Do Not calculate.

b. If the Corporate Tax rate is 30%, what will be the present value of the net effective cash outflow in the 5^th year. Write only the expression. Do not calculate.

Posted Date: Nov 29, 2021 01:51 PM

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Heavy machinery at a project site is purchased on lease. The annual rent for this machinery payable

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