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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.

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.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.
Transcribed Image Text: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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