December 21 Hawker CO question

This topic has 1 reply, 2 voices, and was last updated 2 years ago by IAW3005.

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November 17, 2023 at 10:45 am #695005
iamnawafsheikh@gmail.com
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In the answer section, the CF is discounted at 4%. Can you assist me in understanding why 4% is used here and not 8%?

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November 17, 2023 at 2:13 pm #695013
IAW3005
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When 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.
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