A lessor made an investment in an asset with net cost of investment of ₱800,000 and intends to lease it out for a 5-year term. He determined that he will incur an annual cost of ₱250,000. Tax rate is 25%. Annual depreciation is ₱160,000. Cost of capital is 15%. The breakeven lease per year would be? ₱ 494,450 ₱ 471,503 512,356 ₱ 323,886 ₱ 361,417 ₱ 514,876
A lessor made an investment in an asset with net cost of investment of ₱800,000 and intends to lease it out for a 5-year term. He determined that he will incur an annual cost of ₱250,000. Tax rate is 25%. Annual depreciation is ₱160,000. Cost of capital is 15%. The breakeven lease per year would be? ₱ 494,450 ₱ 471,503 512,356 ₱ 323,886 ₱ 361,417 ₱ 514,876
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
A lessor made an investment in an asset with net cost of investment of ₱800,000 and intends to lease it out for a 5-year term. He determined that he will incur an annual cost of ₱250,000. Tax rate is 25%. Annual depreciation is ₱160,000. Cost of capital is 15%. The breakeven lease per year would be?
₱ 494,450 ₱ 471,503 512,356
₱ 323,886 ₱ 361,417 ₱ 514,876
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education