Hanif Transportation Ltd. (HTL), a producer of electricity, is considering to expand its operation by adding 5 generators. The cost of these generators would be Tk. 80 million. The expected life of the generators is 5 years. The addition of these generators will result in cash inflows of Tk. 42 million per year for 5 years. Cash outflows would be 50% of cash inflows. JKL uses straight line method of depreciation and expects no salvage value from the generators at the end their service life. IDLC, a leading Non-Bank Financial Institution, offered JKL to lease the generators for 5 years. The lease payments to be made at the beginning of each year would be Tk. 18million. The annualized risk-free rate of retum is 7%. Tax rate for both JKL Corporation and IDLC is 30%. a. Show the cash flows associated with the generators to HTL if it decides to buy them. b. Show the cash flows associated with the generators to HTL if it decides to take lease on them from IDLC. c. Show the incremental cash flows for lease versus buy to HTLof the generators. d. Calculate the NPV from the incremental cash flows. If you are the analyst, would you recommend HTLto take a lease on the generators from IDLC or buy them? e. Find out the NPV of the lease of the generators to IDLC. Show the calculation. f. Assume now that JKL Corporation's tax rate is 10% while IDLC's tax rate remained at 30% and IDL Crevises its offer to reduce the lease payments to Tk. 16 million a year. (1) Now find out the NPVto HTL and to IDLC of the lease. Find out the minimum lease payments that IDLC can accept and maximum lease payments that HTL can accept. Hanif Transportation Ltd. (HTL), a producer of electricity, is considering to expand its operation by adding 5 generators. The cost of these generators would be Tk. 80 million. The expected life of the generators is 5 years. The addition of these generators will result in cash inflows of Tk. 42 million per year for 5 years. Cash outflows would be 50% of cash inflows. JKL uses straight line method of depreciation and expects no salvage value from the generators at the end their service life. IDLC, a leading Non-Bank Financial Institution, offered JKL to lease the generators for 5 years. The lease payments to be made at the beginning of each year would be Tk. 18million. The annualized risk-free rate of retum is 7%. Tax rate for both JKL Corporation and IDLC is 30%. a. Show the cash flows associated with the generators to HTL if it decides to buy them. b. Show the cash flows associated with the generators to HTL if it decides to take lease on them from IDLC. c. Show the incremental cash flows for lease versus buy to HTLof the generators. d. Calculate the NPV from the incremental cash flows. If you are the analyst, would you recommend HTLto take a lease on the generators from IDLC or buy them? e. Find out the NPV of the lease of the generators to IDLC. Show the calculation. f. Assume now that JKL Corporation's tax rate is 10% while IDLC's tax rate remained at 30% and IDL Crevises its offer to reduce the lease payments to Tk. 16 million a year. (1) Now find out the NPVto HTL and to IDLC of the lease. Find out the minimum lease payments that IDLC can accept and maximum lease payments that HTL can accept