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Dear Sir,
This question is related to an example given in BPP Study text which is on page 211. In the example it is said that a company is considering whether to acquire a machine outright or lease it. The lease is a FINANCE lease. In the answer, when they calculate the PV of leasing cost they have not taken ‘Tax Savings on Tax dep.’. Why is that? If the leasing facility were an operating lease It would be okay. But in this question the leasing facility is a Finance leasing meaning that risks and rewards are transferred to lessee so that company can claim capital allowances. Cant he?
Thank you in advance. 🙂
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