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 $5,600,000, 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 $1,640,000 per year for four years. |
Assume that your company does not anticipate paying taxes for the next several years. You can borrow at 7 percent before taxes. What is the NAL of the lease? |
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