You work for UTAR that is contemplating leasing printers. Printers’ costs RM 650,000 and would be depreciated straight-line to zero over a decade. You can lease it for RM 100,000 per year for a decade. (a) Assume that the tax rate is 20 percent. You can borrow at 10 percent. Adopt the lease-buy analysis to recommend the best option to UTAR. (b) Malaysia’s government provide a 5% tax reduction during this Covid-19 pandemic. According to the new tax rate, should UTAR remain the option selected in (a)?
You work for UTAR that is contemplating leasing printers. Printers’ costs RM 650,000 and would be depreciated straight-line to zero over a decade. You can lease it for RM 100,000 per year for a decade. (a) Assume that the tax rate is 20 percent. You can borrow at 10 percent. Adopt the lease-buy analysis to recommend the best option to UTAR. (b) Malaysia’s government provide a 5% tax reduction during this Covid-19 pandemic. According to the new tax rate, should UTAR remain the option selected in (a)?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
You work for UTAR that is contemplating leasing printers. Printers’ costs RM
650,000 and would be
lease it for RM 100,000 per year for a decade.
(a) Assume that the tax rate is 20 percent. You can borrow at 10 percent. Adopt the lease-buy analysis to recommend the best option to UTAR.
(b) Malaysia’s government provide a 5% tax reduction during this Covid-19
pandemic. According to the new tax rate, should UTAR remain the option
selected in (a)?
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