A company intends to acquire a machine. The price of the machine is K600,000. The company can borrow this amount from a

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answerhappygod
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A company intends to acquire a machine. The price of the machine is K600,000. The company can borrow this amount from a

Post by answerhappygod »

A company intends to acquire a machine. The price of the machine
is K600,000. The company can borrow this amount from a commercial
bank at 12% simple interest per annum to finance the
purchase. The principal sum is to be paid in 5 equal year-end
instalments.
The company has option to lease the machine for 5 years.
The company seeks your advice to know the maximum lease rent
payable at each year end.
Consider the following additional information:
Suggest the maximum lease rental for the company.
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