Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

l 43% 3:19 pm O You've joined a meeting that is being recorded. Privacy Policy20 TRE question compatibility Model World LGYUU RCICICKO NEW LIG VTC

image text in transcribed

l 43% 3:19 pm O You've joined a meeting that is being recorded. Privacy Policy20 TRE question compatibility Model World LGYUU RCICICKO NEW LIG VTC yuu wa 10 AA Aa- AaBbCd AaBbCcDc AaBbCcDc AabbCD AaBb C AaBbcDd AaBb C AaBbcc AaBbCcl AaBbcc Heading 6 T Normal Strong Subtitle Title 1 No Spac. Heading 1 Heading 2 Heading 5 Heading IUX, X "YA Font Styles hance in Borneo Malaysian State Draft 4 Sept2020 TR2 question (Compatibility Model Corporate Finance Topic Review 2 (15%) There are TWO (2) questions in this test. Answer ALL questions. Question 1 Puan Sri Tanjung, the Jasminum Computers Berhad's president, is in a middle of making decision on buying a big photostat machine. Tuberso Equipment Berhad has offered to sell Jasminum Computers Berhad the necessary machine at a price of RM80,000. It will be completely obsolete in five years and the estimated salvage value is RM8,000. If Puan Sri Tanjung purchases the machine, it will be depreciated using straight-line for five years. Alternatively, the company can lease the machine from Ironless Leasing Enterprise. The lease contract calls for five annual payment of RM18.000 per year. Additionally, Jasminum Computers Berhad must make a security deposit of RM 3,800 that will be returned when the lease expires. Jasminum Computers Berhad will pay RM1,800 per year for a service contract that covers all maintenance costs; insurance and other costs will also be met by Jasminum Computers Berhad. The company options are to borrow the money at 18% to buy the machine from Tuberso Equipment Berhad or to lease it from Ironless Leasing Enterprise. The company has a marginal tax rate of 28%. From the above information you are required to answer the questions below. a. Briefly explain TWO (2) benefits of leasing to Puan Sri Tanjung. (4 Marks) b. Recommend Puan Sri Tanjung whether she should purchase or lease the machine. (6 Marks) (Total: 10 Marks) Saluthah Binti Nain Engish Malaysia l 43% 3:19 pm O You've joined a meeting that is being recorded. Privacy Policy20 TRE question compatibility Model World LGYUU RCICICKO NEW LIG VTC yuu wa 10 AA Aa- AaBbCd AaBbCcDc AaBbCcDc AabbCD AaBb C AaBbcDd AaBb C AaBbcc AaBbCcl AaBbcc Heading 6 T Normal Strong Subtitle Title 1 No Spac. Heading 1 Heading 2 Heading 5 Heading IUX, X "YA Font Styles hance in Borneo Malaysian State Draft 4 Sept2020 TR2 question (Compatibility Model Corporate Finance Topic Review 2 (15%) There are TWO (2) questions in this test. Answer ALL questions. Question 1 Puan Sri Tanjung, the Jasminum Computers Berhad's president, is in a middle of making decision on buying a big photostat machine. Tuberso Equipment Berhad has offered to sell Jasminum Computers Berhad the necessary machine at a price of RM80,000. It will be completely obsolete in five years and the estimated salvage value is RM8,000. If Puan Sri Tanjung purchases the machine, it will be depreciated using straight-line for five years. Alternatively, the company can lease the machine from Ironless Leasing Enterprise. The lease contract calls for five annual payment of RM18.000 per year. Additionally, Jasminum Computers Berhad must make a security deposit of RM 3,800 that will be returned when the lease expires. Jasminum Computers Berhad will pay RM1,800 per year for a service contract that covers all maintenance costs; insurance and other costs will also be met by Jasminum Computers Berhad. The company options are to borrow the money at 18% to buy the machine from Tuberso Equipment Berhad or to lease it from Ironless Leasing Enterprise. The company has a marginal tax rate of 28%. From the above information you are required to answer the questions below. a. Briefly explain TWO (2) benefits of leasing to Puan Sri Tanjung. (4 Marks) b. Recommend Puan Sri Tanjung whether she should purchase or lease the machine. (6 Marks) (Total: 10 Marks) Saluthah Binti Nain Engish Malaysia

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Glencoe Business And Personal Finance

Authors: McGraw-Hill

1st Edition

0021400202, 9780021400201

More Books

Students also viewed these Finance questions