Buildtrock Builders need a crane costing Rs.10 lakhs subject to depreciation on straight line method and has a life of 5 years. The lease rent is Rs.2.2 lakhs per annum to be paid in advance each year for 5 years. If the company can raise debt at 14% per annum payable at the beginning of the year should the company buy or lease the crane.
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- A contract has been signed to lease a building at P200,000 per year with an annual increase of P1,500 for 8 years. Payments are to be made at the end of each year, starting one year from now. The prevailing interest rate is 7%. What is lump sum paid today would be equivalent to the 8-year lease-payment plan?On January 1, 2020, Tamia & Co, sold a machinery and immediately leases it back for a period of 4 years. Remaining useful life of the machinery is 10 years. Selling price is P3,000,000. Carrying amount of the machinery is P2,250,000. Annual rental is P400,000 payable every December 31, starting December 31, 2020. Implicit rate is 10% and PV factor for ordinary annuity at 10% for 4 periods is 3.169865. If the fair value of the sold and leased asset is P3,200,000, what amount of gain/loss related to the right transferred shall be recognized by the seller-lessee? a. Zero b. 950,000 c. 435,796 d. 514,204On January 1, 2020, Mya & Co, sold a machinery and immediately leases it back for a period of 4 years. Remaining useful life of the machinery is 10 years. Selling price is P3,000,000. Carrying amount of the machinery is P2,250,000. Annual rental is P400,000 payable every December 31, starting December 31, 2020. Implicit rate is 10% and PV factor for ordinary annuity at 10% for 4 periods is 3.169865. If the fair value of the sold and leased asset is P2,800,000, what amount of gain/loss related to the right transferred shall be recognized by the seller-lessee? a. 340,225 b. 209,775 c. 550,000 d. None
- Cleanborn Ltd has bought an asset with a life span of 4 years. At the end of the 4 years, replacement of the asset will cost GH¢12,000. In this direction, the company has decided to provide for the future commitment by setting up a sinking fund account into which equal annual investment will be made at the end of each year. Interest rate on the investment will be 12% per annum. Required: a.Calculate the annual instalments b.Draw up the sinking fund schedule to show the growth fund c. Assuming the first payments will be made now and 12 months thereafter, what are the annual payments? d. Draw up the sinking fund schedule under (c)A manufacturer needs to borrow money to purchase a building. The purchase price of thebuilding is $1.5 million, and the company will put $300,000 in cash down at closing. If thecompany can borrow the difference from its bank at 4.85% for 20 years, what will the monthlyprincipal and interest payment of the loan be? Create an amortization schedule also.Your firm is considering leasing a new computer. The lease lasts for 4 years. The lease calls for 5 payments of $450 per year with the first payment occurring immediately. The computer would cost $5,900 to buy and would be depreciated using the straight-line method to zero salvage over 4 years. The firm can borrow at a rate of 7%. The corporate tax rate is 21%. What is the NPV of the lease?
- Q1. A machine costs the company K98,000 and its effective life is estimated to be 12 years. If the scrap realizes K3,000 only, what amount should be retained out of profits at the end of each year to accumulate at compound interest at 5% per annum? Q2. A mortgage of K200,000 is to be repaid over a 25 year period at a fixed interest rate of 4.5 %. Calculate the monthly repayments.Suppose you obtain a five-year lease for a Porsche and negotiate a selling price of $157,000. the annual interest-rate is 8.4%, the residual value is $76,000, and you make a down payment of $5000. Find each of the following. A) the net capitalized cost B) the money factor (round to 4 decimal places) C) the average monthly finance charge (round to the nearest cent) D) the average monthly depreciation (round to the nearest cent) and E) the monthly lease amount (round to the nearest cent)A car costs $19,900. Alternatively, the car can be leased for 6 years by making payments of $251 at the beginning of each month and then bought at the end of the lease for $5,692. If interest is 6% compounded semi-annually, which alternative is preferable?
- Jenny Enterprises has just entered a lease agreement for a new manufacturing facility. Under the terms of the agreement, the company agreed to pay rent of $12,500 per month for the next 10 years with the first payment due today. If the APR is 6.48 percent compounded monthly, what is the value of the payments today?Suppose you wish to borrow Php 20,000,000 to buy a parcel of real estate. The lender is willing to lend the money at 10% per annum. Amortize the payments monthly over 10 years. AF: 0.0132150737,An equipment which costs ₱ 40,000 is to be purchased through a series of 10 semi-annual payments in which the first payment is due 6 months after the equipment is released. The first 6 payments will be ₱6,000 each, while the remaining 4 equal payments will liquidate the remaining balance. What is the amount of the last 4 payments if the interest rate is 15% compounded semi-annually?