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What would the lease payment have to be

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Question - 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 $6.3 million and it qualifies for a 30% CCA rate. Because of radiation contamination, it is valueless in four years. You can lease it for $1.875 million per year for four years. Assume that the assets pool remains open and payments are made at the end of the year. Assume the tax rate is 37%. You can borrow at 8% pre-tax. What would the lease payment have to be for both lessor and lessee to be indifferent to the lease?

Reference no: EM132909758

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