Topic :-- Leasing
If interest rate on loan is 20%,
tax rate 35%,
& cost of capital if company is 16%
Then what will be discount rate for computing present value..??
4 Replies
AMRITA SINGH
(KOLKATA)
(419 Points)
Replied 21 May 2018
I also have the same query. I have found that in many questions they have taken 13% (after tax of 20%) as discount rate for calculating PV. But in some questions they have taken 16% also. I am also confused as which rate is to be taken for calculating lease rentals and discounting factor??
Pardeep Garg
(CA-Final Student)
(801 Points)
Replied 22 May 2018
yea...
I have got answer we can take either cost of capital or post tax loan rate..
I have got answer we can take either cost of capital or post tax loan rate..
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