Leasing Cash Flows 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 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 your company does not contemplate paying taxes for the next several years. You can borrow at 6 percent before taxes. What is the NAL of the lease? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) NAL

Essentials Of Investments
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ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Problem 21-4 Taxes and Leasing Cash Flows
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 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 your company does
not contemplate paying taxes for the next several years. You can borrow at 6 percent
before taxes. What is the NAL of the lease? (Do not round intermediate calculations
and round your answer to 2 decimal places, e.g., 32.16.)
NAL
Transcribed Image Text:Problem 21-4 Taxes and Leasing Cash Flows 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 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 your company does not contemplate paying taxes for the next several years. You can borrow at 6 percent before taxes. What is the NAL of the lease? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) NAL
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