Capex

Depreciation pa
Tax Rate
Cash outflow
Tax Benefit
Net Cost
Interest (10%)
Leasing
Cash Outflow
300000
300000
300000
300000
300000

1000000
200000
40%
300000
120000
180000 163636.3636 148760.3 135236.7

Tax Benefit Net Outflow

120000
180000
120000
180000
120000
180000
120000
180000
120000
180000
NPV
($682,341.62)

part 2
if lesser wants a return of 15%

-1000000
300000
300000
300000
300000
300000

122942.422 111765.8382

Buying
Cash Outflow Tax Benefit
-1000000
Depreciation Tax Benefit
200000
80000
200000
80000
200000
80000
200000
80000
200000
80000
NPV
($696,737.06)

200000
200000
200000
200000
200000
682341.6
11372.36

Net Outflow

-1000000
80000
80000
80000
80000
80000

72727.27
66115.7
60105.18
54641.08
49673.71
-696737

1000000
-260000
-260000
-260000
-260000
-260000
$14,395.44

Period
3 yrs
Cost of server
4500000
Salvage Value Nil
Leasing Cost pa 1800000
Borrowing Rate
12%
Tax
40%
Depreciation
33%

Buying
-4500000
Depreciation Tax Benefit
1500000
600000
1500000
600000
1500000
600000
NPV
($2,931,146.37)

-3058901.239

Discount Rate

0.072
7.2

Leasing
Cash Outflow Tax
Net Cash Outflow
1800000
720000
1080000
1800000
720000
1080000
1800000
720000
1080000
NPV
($2,823,936.54)
better as low cost

Period
3 yrs
Cost of server
4500000
Salvage Value
300000
Leasing Cost pa 1800000
Borrowing Rate
12%
Tax
40%
Depreciation
33%
WDV Rate
-59%

WDV Rate alternative method

Op value
dep
closing value
4500000 -2675339 1824661
1824660.599 -1084797 739863.6
739863.6223 -439864
300000

1000000
250000
750000
187500
562500
140625
421875 105468.8
316406.25 79101.56

0.40548013
-0.5945199

Buying
Depreciation
2675339
1084797
439864
NPV

Discount Rate

Initial Outlay
Less:Depreciation
Net Amt
Add: Salvage
Net Amt
Less: Tax
Net Amt
NPV (12%)

0
-10

-4500000
Tax Benefit
1070135.6
433918.8
475945.6 add salvage here
($2,737,807.64)
This is better

Leasing
Cash Outflow Tax
Net Cash Outflow
1800000
720000
1080000
1800000
720000
1080000
1800000
720000
1080000
NPV
($2,823,936.54)
better as low cost

-2859835.698

0.072
7.2
1
600000
-250000
350000

2
600000
-188000
412000

3
600000
-140000
460000

175000
175000
156275

206000
206000
164182

230000
230000
163760

4
600000
-105000
495000

5
600000
-79000
521000
100000
621000
247500
260500
247500
260500
157410 147703.5

789330.5

Period
3 yrs
Cost of server
4500000
Salvage Value
300000
Leasing Cost pa 1800000
Borrowing Rate
15%
Tax
40%
Depreciation
33%
WDV Rate
-59%

What will be the lease rental in case lesse cant service the rental in 1st year
1800000 1565217
1800000 1361059
1800000 1183529
4109805
9506229
7188075
3343291
What if the servicing amt increases by 15% every year
multiply each year as following
1.15^1
1.15^2
1,15^3