1. 11. Lease versus borrow [LO 27.3] Return to the case of the diagnostic scanner used in...

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1. 11.

Lease versus borrow [LO 27.3] Return to the case of the diagnostic scanner used in Problems 1 through 5. Suppose the entire $4 800 000 purchase price of the scanner is borrowed. The rate on the loan is 8 per cent, and the loan will be repaid in equal instalments. Create a leaseversus-

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 Question 1. Why is this so?

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