Refer to the given data:

Asset cost = Rs 220 lac Lease payments for the first 7 years = Rs 23 lac Lease payments for the next 8 years = Rs 28 lac Salvage value = 0 Lease payments are made at the end of the year Cost of debt for the lessee is 9 percent after tax Depreciation is charged @ 25 percent.

Tax rate is 35 percent.

Find the NAL. Would you lease?

Rework with a tax rates of 35 percent and 0 percent for the lessor and the lessee respectively. What is the break-even lease rental?