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2 Suppose that National Waferonics has before it a proposal for a four-year financial lease. Year 0 Lease cash flow +$58,900 Year 1 -$27,600
2 Suppose that National Waferonics has before it a proposal for a four-year financial lease. Year 0 Lease cash flow +$58,900 Year 1 -$27,600 Year 2 -$23,000 Year 3 -$18,400 10 points eBook Print References These flows reflect the cost of the machine, depreciation tax shields, and the after-tax lease payments. Ignore salvage value. Assume the firm could borrow at 14% and faces a 21% marginal tax rate. a. What is the value of the equivalent loan? Note: A negative answer should be indicated by a minus sign. b. What is the value of the lease? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. c-1. Suppose the machine's NPV under normal financing is -$4,200. Should National Waferonics invest? c-2. Should it sign the lease? a. Value of the equivalent loan b. Value of the lease c-1. Should National Waferonics invest? c-2. Should it sign the lease?
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