Question 2 Dylan Thomas Ltd requested your advice regarding the proposed sale and leaseback of its main operations property. You agreed to forward to the Dylan Thomas Ltd's management your recommendation supported by adequate calculations based on following data. The property would be sold to Zarkava Ltd for $50,000,000. It would be leased back for $8,000,000 Tax deductible depreciation on the property is 4% per annum. per annum, payable in advance for five years. Both companies agree that the property would increase in value by 20% by the end of the lease contract. In five years' time the property would be sold for $60,000,000. The company income tax of 30% is payable in the year of income. Dylan Thomas Ltd's Cost of Capital is 12% after tax. Dylan Thomas Ltd would continue pay council rates and maintenance costs of $300,000 annually, which is exactly the amount it would be paying if it chose to retain the ownership by not entering in the proposed sale and leaseback contract