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 $2,000,000, 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 $600,000 per year for four years.

In the previous question, over what range of lease payments will the lease be profitable for both parties?

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Assume that your company does not contemplate paying taxes for the next several years. What are the cash flows from leasing in this case?