Depreciation tax shield =(5900000/5)*25% =295000
Aftertax lease payment =1450000*(1-0.25) =1087500
OCF =295000+1087500 =1382500
After tax cost of debt =8%*(1-0.25) =6%
NAL =5900000-1382500(PVFIA 6%,5)
NAL =5900000-5823592.93
NAL =76407.07
b) Buy
You work for a nuclear research laboratory that is contemplating leasing a diagnostic scanner (leasing 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 $6,300,000, 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 $1,950,000 per year for four years. Assume that the tax rate is 35 percent. You can borrow at 10 percent before taxes. Calculate 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 $6,300,000, 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 $2,259,000 per year for three years. Assume that the tax rate is 35 percent. You can borrow at 12 percent before taxes. ...
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. Calculate 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 $6,200,000, 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 $1,810,000 per year for four years. Assume that the tax rate is 22 percent. You can borrow at 7 percent before taxes. What...
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 $7,200,000, Because of radiation contamination, it will actually be completely valueless in four years. You can lease it for $2,115,000 per year for four years. Assume that the tax rate is 24 percent. You can borrow at 8 percent before taxes. Assume that the scanner will be depreciated as three-year property under the MACRS...
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 $7,200,000, Because of radiation contamination, it will actually be completely valueless in four years. You can lease it for $2,115,000 per year for four years. Assume that the tax rate is 24 percent. You can borrow at 8 percent before taxes. Assume that the scanner will be depreciated as three-year property under the MACRS...
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 $4,500,000 and would be depreciated straight-line to zero over three years. Because a radiation contamination, it will actually be completely valueless in three years. You can lease it for $1,650, 000 per year for three years. Assume that the tax rate is 21 percent. You can borrow at 6 percent before taxes. Calculate the...
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. You can lease it for $1,580,000 per year for four years. Assume that the tax rate is 24 percent. You can borrow at 8 percent before taxes. Calculate 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 $5,200,000, 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. The tax rate is 22 percent and you can borrow at 6 percent before taxes. What would the lease payment have to be for both lessor and lessee...
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 $6,500,000 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 $2,673,000 per year for three years. Assume a 35 percent tax bracket. You can borrow at 12 percent before taxes. What is...