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IBFS.D.3.A - Name Set-A Roll No IBFS-D Internal test-3(Date...

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Set-A Name:……………………. Roll No…………………..… IBFS-D: Internal test-3 (Date: 30.8.2008) Total Marks: 15 Time: 45 Minutes Note: Attempt both questions. Each question carries 7.5 marks. 1. ABCL has decided to invest in equipment for which the following particulars are available. A Cost of the equipment Rs 42 lakh B Tax relevant rate of depreciation 25% C Useful life 3 years D Estimated net salvage value after 3 years Negligible ABCL has received a lease proposal from XYZL to structure a finance lease on the following terms: E Nature of Lease Finance Lease F Lease Rental Rs 47.50 Per thousand G Mode of Payment Monthly in advance H Period of Lease 3 Years The other details of the transaction are as follows. Marginal cost of Capital for ABCL 15% Marginal cost of debt for ABCL 16% ( Pre-tax) K Minimum rate of return required by XYZL on Lease portfolio 14% CALCULATE THE FOLLOWING a. Break even rentals for the Lessor b. Break even rentals for the Lessee (3.75+3.75 =7.5 marks) 1
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2. ABCL offers the factoring services on the terms and conditions given below.
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