[gisizzlah]

61… one more to go…

[gisizzlah]

just saw this post … I too got horrible customer service from LSBF, I hope everything worked out for you…

[gisizzlah]

hi marcin,

I’ll attempt to answer the question but im not sure if im right

we are looking to arrive at the tax relief from the Writing Down Allowance from the lease rental payments, which would be:

150000 x 0.3 = 45000

However remember in the question it said that “Assume that tax is payable one year after the end of the accounting year…”
Thus the relief will be in Year 2.

we have to adjust the present value annuity to reflect this…
so taking the annuity for 4 years and divide it by the 1 + discount rate:

3.170/1 + .10 = 2.882

This will be the annuity Discount factor at 10% to use. then multiply by the tax relief of 45000

45000 x 2.882 = 129690

I’m a lil off but thats the basic jist i guess…
Hope it helps…
anyone else is free to correct me if im wrong…

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