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Contemplating leasing a diagnostic scanner

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Reference no: EM131016552

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 $7,900,000. Because of radiation contamination, it will actually be completely valueless in four years. You can lease it for $2,275,000 per year for four years. Assume that the tax rate is 35 percent. You can borrow at 6 percent before taxes. Assume that the scanner will be depreciated as three-year property under MACRS.

Calculate the NAL.

Reference no: EM131016552

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