in case of finance lease, wht will be the IRR of lease if the actual lease rent receivable is less than actual cost of the asset.
for eg.
Actual cost of the asset =1 lac.
Actual rent receivable is Rs. 20000/- for 4 years i.e it will be Rs. 80000/- only which is less than actual cost of asset.
Hence Wht will be IRR...... ?
in this situation IRR can not be computed..because the lessor is not getting his capital outlay back..this is not at all a viable decision to lease the asset at that rent..
Theoritically for lessor point of view Fair Value of Asset is irrelevant.
and Practically Mr. Sudipta Sinha is Correct.
| Originally posted by : Nishant | ||
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Theoritically for lessor point of view Fair Value of Asset is irrelevant. and Practically Mr. Sudipta Sinha is Correct. |
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