Dear Forum Members,
Our company was planning to lease an equipment from a leasing company for which the leasing company submitted the following calculation showing the attractiveness of the leasing arrangement. I am not able to decide how it is beneficial to the company. The calculations are made from the point of view of the leasing company and the IRR comes to 8.31%.(Plz see attachment). Now at 8.31% leasing company does not incur any profit/ loss so how is this beneficial for the company?
On the same line i am considering a different case wherein the company is taking a loan of 5 Crs and i have calculated IRR from the company's point of view wherein the IRR comes to 22.54 and the loan is being offered at 13%. So is this viable? Is the company benefitting from the situation?
Please reply its urgent.
Attached File : 1086777 20160119173834 equipment leasing irr calculation.xls downloaded: 144 times
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