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Agrani Ltd . Is in the business of manufacturing bearings. Some more product lines are being planned to be added to the existing system. The
Agrani Ltd Is in the business of manufacturing bearings. Some more product lines are being planned to be added to the existing system. The machinery required may be bought or may be taken on lease. The cost of machine is Rs having a useful life of years with the salvage value of Rs The full purchase value of machine can be financed by loan repayable in equal installments due at the end of each year. NOV Alternatively, the machine can be procured on a years lease, year end lease rentals being Rs pa The company follows the WDV method of Depreciation @ Companys tax rate is and cost of capital is : iAdvise the company which option it should choose lease or borrow. iiAssess the proposal from lessors point of view examining whether leasing the machine is financially viable @ cost of capital
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