The minimum lease payment for N Limited is Rs. 12 Lakh. This is because the lease agreement requires N Limited to make a payment of Rs. 1 lakh for 15 years, regardless of any other conditions. The present value of these payments is Rs. 12 lakh. The other terms of the lease agreement (reimbursement of tax, extra payment for a petrol pump, option to purchase land) are not mandatory. Therefore, they do not affect the minimum lease payment.

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Asked by MR.AJ10 Jan 2025892 views

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Ganesh · 11 Jan 2025
The minimum lease payment for N Limited is Rs. 12 Lakh. This is because the lease agreement requires N Limited to make a payment of Rs. 1 lakh for 15 years, regardless of any other conditions. The present value of these payments is Rs. 12 lakh. The other terms of the lease agreement (reimbursement of tax, extra payment for a petrol pump, option to purchase land) are not mandatory. Therefore, they do not affect the minimum lease payment.

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