In the answer section, the CF is discounted at 4%. Can you assist me in understanding why 4% is used here and not 8%?
Best Regards
Ask the Tutor ACCA FM
December 21 Hawker CO question
2y ago#1When we are deciding between lease v buy questions – we are simply deciding which is the cheaper of the two.
Since borrowing is costing 4% we discount at 4% just to see whether leasing is more or less expensive.
Do watch our free lectures on this where we do explain.
Sign into reply to this topic.