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NEW QUESTION: 1
A company plans a four-year project which will be financed by either an operating lease or a bank loan.
Lease details:
* Four year lease contract.
* Annual lease rentals of $45,000, paid in advance on the 1st day of the year.
Other information:
* The interest rate payable on the bank borrowing is 10%.
* The capital cost of the project is $200,000 which would have to be paid at the beginning of the first year.
* A salvage or residual value of $100,000 is estimated at the end of the project's life.
* Purchased assets attract straight line tax depreciation allowances.
* Corporate income tax is 20% and is payable at the end of the year following the year to which it relates.
A lease-or-buy appraisal is shown below:
Which THREE of the following items are errors within the appraisal?
A. Tax relief on lease payments have not been lagged correctly
B. The project's operating cashflows should be included
C. Using the 10% discount rate is incorrect
D. The salvage value has been included within the lease option
E. The bank loan repayments should be included
F. Lease payments are timed incorrectly
Answer: A,C,D
NEW QUESTION: 2
A. Option D
B. Option A
C. Option C
D. Option B
Answer: A
NEW QUESTION: 3
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ソリューションは目標を達成していますか？
A. はい
B. いいえ
Answer: A