Contemplating leasing diagnostic scanner

Assignment Help Financial Management

Reference no: EM131343523

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 $7,300,000, 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. Assume that the tax rate is 35 percent. You can borrow at 12 percent before taxes.

What would the lease payment have to be for both the lessor and the lessee to be indifferent about the lease? (Enter your answer in dollars, not millions of dollars, e.g., 1,234,567. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Break-even lease payment $

Reference no: EM131343523

Questions Cloud

Describe how foodborne illnesses can be prevented : FCS 1253: Describe how foodborne illnesses can be prevented.a. Discuss foodborne infections and intoxications and common pathogens in each classification.b. List food production and preparation strategies that help to prevent foodborne illness.c. Dis..

What is the reason for a placebo group : What are demand characteristics? Describe ways to minimize demand characteristics.

Bonds are selling at par value-what is cost of equity : Johnson Tire Distributors has an unlevered cost of capital of 11 percent, a tax rate of 33 percent, and expected earnings before interest and taxes of $1,300. The company has $2,300 in bonds outstanding that have a 7 percent coupon and pay interest a..

Where does the government fall into this relationship : Where does the government fall into this relationship; are they a provider, payer, or both? Lastly, how has this relationship changed over time

Contemplating leasing diagnostic scanner : 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 $7,300,000, and it would be depreciated straight-line to zero over fou..

What are the general types of dependent variables : What is the difference between staged and straightforward manipulations of an independent variable?

Discuss about the lean operating systems : From the second e-Activity, compare and contrast the lean service system found with Southwest Airlines to a full-service airline such as United Airlines, British Airways, and other large carriers in terms of cabin service, boarding process, baggag..

Distinguish between simple random and stratified random : Why don't researchers who want to test hypotheses about the relationships between variables worry a great deal about random sampling?

Buy new computer-assisted drilling system : The Wildcat Oil Company is trying to decide whether to lease or buy a new computer-assisted drilling system for its oil exploration business. Management has decided that it must use the system to stay competitive; it will provide $2.1 million in annu..

User Account

All Pages