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Bpp question 147..page 40
Sir can u please explain under buy option how to arrive at tax amount of 8 ?
Also the question says payment is made at the start of the year .. so why do we deduct it in year 2 and not year 3 ..
Can u also explain why is there no tax deduction for year 0.. when the machine is boughtI assume that you are referring to the BPP Study Text. I do not have the Study Text – only the Revision Kit – and so I can’t help you.
However, if you watch my free lectures on lease v buy then it should all make sense. (The lectures are a complete free course for Paper F9 and cover everything needed to be able to pass the exam well.
There is no such thing as ‘year 0’. Time 0 is a point in time and is the start of the first year. Time 1 is one year later and is therefore the end of the first year and the start of the second year. Again all of this is explained in my lectures.
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