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Beam ltd Ltd is deliberating on whether to lease or buy new equipment. The equipment...

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Finance

Beam ltd Ltd is deliberating on whether to lease or buy new equipment. The equipment costs R200 000. The lease period is for 5 years and wear and tear on equipment over 3 years. The applicable after tax interest rate is 10%. Assume the Corporate tax rate is applicable and annual lease payment is R15 000

Question 1.9 The after tax lease payments can be calculated as:

A R 10 200

B R 10 300

C R 10 500

D R 10 800

Question 1.10 Calculate the annual wear and tear tax shield.

A R 19 667

B R 18 667

C R 17 667

D R 16 667

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