VOUS HISTORATIONS Tuve any operational implications or is it merely a theoretical concept A) ZuriZone Ltd. is in the business of manufacturing steel utensils. The firm is planning to diversify and add a new product line. The firm can either buy the required machinery or get it on lease. The machine can be purchased for 15,00,000. It is expected to have a useful life of 5 years with salvage value of 1,00,000 after the expiry of 5 years. The purchase can be financed by 20 percent loan repayable in 5 instalments of the principal amount falling due at the end of each year. Alternatively, the machine can be taken on year-end lease rentals of *4,50,000 for 5 years. The company follows the WDV method of depreciation at the rate of 25%. Company's tax rate is 35% and cost of capital is 18%. Advice the company to lease the machinery or buy it with borrowed funds. BU Howevillevou evaluate a leasing problem? Explain any one method in detail