Return to the case of the diagnostic scanner used in Problems 1 through 6. Suppose the entire

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Return to the case of the diagnostic scanner used in Problems 1 through 6. Suppose the entire $5,400,000 purchase price of the scanner is borrowed. The rate on the loan is 8 percent, and the loan will be repaid in equal installments. Create a lease-versus-buy analysis that explicitly incorporates the loan payments. Show that the NPV of leasing instead of buying is not changed from what it was in Problem 1. Why is this so?

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Fundamentals of Corporate Finance

ISBN: 978-0077861704

11th edition

Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan

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