Question

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 $3,000,000 and it would be depreciated straight-line to zero over 4 years. Because of radiation contamination, it will actually be completely valueless in 4 years. You can lease it for $900,000 per year for 4 years. Assume a 32 percent tax bracket. You can borrow at 10 percent before taxes. What is the net advantage to leasing (NAL) from the lessor's viewpoint? |

Answer #1

You work for a nuclear research laboratory that is contemplating
leasing a diagnostic scanner (leasing is a common practice with
expensive, high-tech equipment). The scanner costs $5,400,000 and
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 $1,540,000 per year
for four years.
Assume a 25 percent tax bracket. You can borrow at 6 percent
before taxes. What is the NAL...

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 $5,300,000
and it would be depreciated straight-line to zero over four years.
Because of radiation contamination, it actually will be completely
valueless in four years. You can lease it for $1,550,000 per year
for four years.
The tax rate is 23 percent. You can borrow at 7 percent before
taxes. What is...

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 $4,500,000
and it would be depreciated straight-line to zero over three years.
Because of radiation contamination, it will actually be completely
valueless in three years. You can lease it for $1,925,000 per year
for three years. Assume a 35 percent tax bracket. You can borrow at
14 percent before taxes.
What is the...

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 $3,000,000
and it would be depreciated straight-line to zero over 4 years.
Because of radiation contamination, it will actually be completely
valueless in 4 years. You can lease it for $900,000 per year for 4
years. Assume the tax rate is 31 percent. You can borrow at 7
percent before taxes.
What is...

You work for a nuclear research laboratory that is contemplating
leasing a diagnostic scanner (leasing is a common practice with
expensive, high-tech equipment). The scanner costs $5,700,000 and
would be depreciated straight-line to zero over five years. Because
of radiation contamination, it will actually be completely
valueless in five years. You can lease it for $1,320,000 per year
for five years. Assume a 23 percent tax bracket. You can borrow at
6 percent before taxes. What is the NAL of...

You work for a nuclear research laboratory that is contemplating
leasing a diagnostic scanner (leasing is a common practice with
expensive, high-tech equipment). The scanner costs $5,700,000 and
would be depreciated straight-line to zero over five years. Because
of radiation contamination, it will actually be completely
valueless in five years. You can lease it for $1,320,000 per year
for five years. Assume a 23 percent tax bracket. You can borrow at
6 percent before taxes. What is the NAL of...

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 $5,200,000
and it would be depreciated straight-line to zero over five years.
Because of radiation contamination, it actually will be completely
valueless in five years. You can lease it for $1,220,000 per year
for five years. The tax rate is 22 percent. You can borrow at 6
percent before taxes. What is the...

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 $5,800,000
and it would be depreciated straight-line to zero over five years.
Because of radiation contamination, it actually will be completely
valueless in five years. You can lease it for $1,370,000 per year
for five years.
The tax rate is 23 percent. You can borrow at 6 percent before
taxes. What is...

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 $5,400,000
and it would be depreciated straight-line to zero over five years.
Because of radiation contamination, it actually will be completely
valueless in five years. You can lease it for $1,340,000 per year
for five years.
The tax rate is 24 percent. You can borrow at 8 percent before
taxes. What is...

You work for a nuclear research laboratory that is contemplating
leasing a diagnostic scanner (leasing is a common practice with
expensive, high-tech equipment). The scanner costs $6,100,000 and
would be depreciated straight-line to zero over six years. Because
of radiation contamination, it will actually be completely
valueless in six years. You can lease it for $1,260,000 per year
for six years. Assume that the tax rate is 22 percent. You can
borrow at 7 percent before taxes.
Calculate the...

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