Question
A company is considering following proposals .cost of the machinery is rs. 20 lakhs,life time 10 years with no scrap value Proposal1-Taking a machine in
A company is considering following proposals .cost of the machinery is rs. 20 lakhs,life time 10 years with no scrap value
Proposal1-Taking a machine in lease.lease payments are to be made in advance .Rate of return is 10 percent.The asset to be completely amortized.
Proposal 2-Taking a loan and buying the machine. Cost of debit is 16 percent.The loan has to be paid in 10 equal installments.Income tax rate is 35 percent. Straight line method of depreciation is followed.
Question: As a financial consultant what advice will you suggest?
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Business Statistics
Authors: Norean Sharpe, Richard Veaux, Paul Velleman
3rd Edition
978-0321944726, 321925831, 9780321944696, 321944720, 321944690, 978-0321925831
