Solution-Cashflows for the leasee, You work for a nuclear

Cashflows for the leasee

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Reference no: EM133058073

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 $6.31 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 $1,510,081 per year for four years.

Assume that the tax rate is 26%. You can borrow at 7.57% before taxes. What would be the cashflows for the leasee?

HINT: Determine the cashflows if you lease, and send those cash flows to the present. Remember that the cash flows are negative as the leasee is paying

Reference no: EM133058073

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Cashflows for the leasee

Reference no: EM133058073

Reference no: EM133058073

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