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Are we supposed to take the cost of capital or the after tax interst rates for discounting if both the details are given in a question? PM solves in both the ways. kindly help
Replies (4)
Method which is comfortable to you go for it
okey. thank you
Incase cost of capital of the leasing company is available at the inception of lease then we must take Cost of capital, else we will use incremental borrowing rate.
Please refer AS-19 Leases para 3.17 and 3.18
Cost of capital should be considered rather post tax interest rates..
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