Leasing is very common practice with expensive

Assignment Help Financial Management

Reference no: EM131566097

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 $7,100,000 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 $2,352,000 per year for four years. Assume a 35 percent tax bracket. You can borrow at 13 percent before taxes. What is the NAL of the lease from the lessor's viewpoint? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Reference no: EM131566097

Questions Cloud

Lease payments will lease be profitable for both parties : Over what range of lease payments will the lease be profitable for both parties?

Both lessor and lessee to be indifferent about the lease : What would the lease payment have to be for both lessor and lessee to be indifferent about the lease?

What will the dividend be in five years : The dividend will grow at a steady pace of 8 percent per year. What will the dividend be in five years (D5)?

Required in order to meet minimum profit goal : What sales volume would be required in order to meet the minimum profit goal?

Leasing is very common practice with expensive : You work for nuclear research laboratory that is contemplating leasing diagnostic scanner (leasing is very common practice with expensive, high-tech equipment)

Does your organization use responsibility centers : Does your organization use responsibility centers? Please explain. My organization name is hemotology oncology infusion therapy.

Your portfolio but with the same expected? return : What portfolio has a lower volatility than your portfolio but with the same expected? return?

Thinking about the need for life insurance : Who is a single parent is excited that you are taking this course as he has been thinking about the need for life insurance.

Should the cost of the land be considered as project cost : A firm currently owns land in another city where it would like to expand its operations. Should the cost of the land be considered as a project cost?

User Account

All Pages