What is the nal for wildcat

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Problem 1: 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 already determined that acquisition of the system has a positive NPV. The system costs $9.6 million and qualities for a 27% CCA rate. The equipment will have a $971000 salvage value in 5 years. Wildcat's tax rate is 38%. and the ?rm can borrow at 9.2%. Southtown Leasing Company has offered to lease the drilling equipment to Wildcat for payments of $2.17 million per year. Southtown's policy is to require its lessees to make payments at the start of the year. What is the NAL for Wildcat?

Reference no: EM132754600

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