You work for a nuclear research laboratory that is contemplating leasing a diagnostic scanner (leasing is a very common practice with expensive, high-tech equipment). The scanner costs $6,300,000, and it would be depreciated straight-line to zero over four years. Because of radiation contamination, it will actually be completely valueless in four years. You can lease it for $1,875,000 per year for four years.
1. Lease or Buy [LO3] Assume that the tax rate is 35 percent. You can borrow at 8 percent before taxes. Should you lease or buy?
2. Leasing Cash Flows [LO3] What are the cash f ows from the lease from the lessor
You work for a nuclear research laboratory that is contemplating leasing a diagnostic scanner (leasing is a very common practice with expensive, high-tech equipment). The scanner costs $6,300,000, and it would be depreciated straight-line to zero over four years. Because of radiation contamination, it will actually be completely valueless in four years. You can lease it for $1,875,000 per year for four years.
1. Lease or Buy [LO3] Assume that the tax rate is 35 percent. You can borrow at 8 percent before taxes. Should you lease or buy?
2. Leasing Cash Flows [LO3] What are the cash f ows from the lease from the lessor
Related questions
| You work for a nuclear research laboratory that is contemplating leasing a diagnostic scanner (leasing is a very common practice with expensive, high-tech equipment). The scanner costs $6,900,000. Because of radiation contamination, it will actually be completely valueless in four years. You can lease it for $1,960,000 per year for four years. Assume that the tax rate is 35 percent. You can borrow at 6 percent before taxes. Assume that the scanner will be depreciated as three-year property under MACRS. |
| What is the NAL of the lease? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
| NAL | $ |
