You work for a nuclear research laboratory that is contemplating leasing a diagnostic scanner (leasing is a common practice with expensi high-tech equipment). The scanner costs $5,300,000 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 $1,580,000 per year for four years. Ass the tax rate is 24 percent. The borrowing rate is 8 percent before taxes. Your company does not expect to pay taxes for the next several but the leasing company will pay taxes. Over what range of lease payments will the lease be profitable for both parties?

You work for a nuclear research laboratory that is contemplating leasing a diagnostic scanner (leasing is a common practice with expensi high-tech equipment). The scanner costs $5,300,000 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 $1,580,000 per year for four years. Ass the tax rate is 24 percent. The borrowing rate is 8 percent before taxes. Your company does not expect to pay taxes for the next several but the leasing company will pay taxes. Over what range of lease payments will the lease be profitable for both parties?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter19: Lease And Intermediate-term Financing

Section: Chapter Questions

Problem 9P

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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 $4,800,000, 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 $1,430,000 per year for four years. Assume that the tax rate is 21 percent. Suppose the entire $4,800,000 purchase price of the scanner is borrowed. The rate on the loan is 8 percent, and the loan will be repaid in equal annual installments. Calculate the amount of annual loan repayment.
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 $4,800,000, 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 $1,430,000 per year for four years. Assume that the tax rate is 21 percent. You can borrow at 8 percent before taxes. What is the NAL of the lease from the lessor's viewpoint? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
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 $5,100,000 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 $1,480,000 per year for four years. Assume the tax rate is 22 percent. Suppose the entire $5,100,000 purchase price of the scanner is borrowed. The rate on the loan is 7 percent and the loan will be repaid in equal installments. Calculate the amount of the annual loan repayment. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
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 that the tax rate is 25 percent. You can borrow at 6 percent before taxes. What is the NAL? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) NAL= ?
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 $5,300,000 and would be depreciated straight-line to zero over four years. Because of radiation contamination, it will actually be completely valueless in four years. Assume that the tax rate is 24 percent. You can borrow at 8 percent before taxes. What would the lease payment have to be for both the lessor and the lessee to be indifferent about the lease? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
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 $6,200,000 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 $1,320,000 per year for six years. Assume the tax rate is 23 percent. The borrowing rate is 8 percent before taxes. Your company does not expect to pay taxes for the next several years, but the leasing company will pay taxes. Over what range of lease payments will the lease be profitable for both parties? (Enter your answers from lowest to highest. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)