A hospital must install a $1.5 million computer. It plans to use the computer for 3 years. The hospital can obtain a 10 percent bank loan to buy the computer, or it can lease the computer for 3 years.

Assume that the following facts:

-- The computer falls into the 3 year class for tax depreciation, so the MACRS allowances are 0.33, 0.45, 0.15, and 0.07 in years 1 through 4, respectively.

-- The company's marginal tax rate is 34 percent.

-- Tentative lease terms call for payments of $500,000 at the end of each year.

-- The best estimate for the value of the computer after 3 years of wear and tear is $500,000.

How would I figure out the NAL and IRR of the lease?