Question: . QUESTION 6 (18 MARKS) a) b) Lease is contractual agreement for use of an asset in return for a series of payments. Explain TWO

. QUESTION 6 (18 MARKS) a) b) Lease is contractual agreement for use of an asset in return for a series of payments. Explain TWO (2) types of leases and highlight several differences between leases. (8 marks) (CLO3-PLO2:C4) You work for a nuclear research laboratory that is contemplating leasing a diagnostic scanner (leasing is a very common practice with expensive, high-tech equipment). The scanner costs RM2 million and it would be depreciated straight-line to zero over 4 years. Because of radiation contamination, it will actually be completely valueless in 4 years. You can lease it for RM500,000 per year for 4 years. Assume the tax rate is 34 percent. You can borrow at 10 percent before taxes. Calculate the net advantage to leasing from the lessor's viewpoint. (5 marks) (CLO3:PLO2.C4) c) Discuss the differences between purchasing an asset and leasing an asset. (5 marks) (CLO3 PLO2:C4)

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