Answer all questions please

Problem $21-1$ Lease or Buy

You work for a nuclear research laboratory that is contemplating leasing a diagnostic

scanner $($leasing is a common practice with expensive, high$-$tech equipment$).$ The

scanner costs $$4,700,000$ and would be depreciated straight$-$line to zero over three

years. Because of radiation contamination, it will actually be completely valueless in

three years. You can lease it for $$1,750,000$ per year for three years. Assume that the tax

rate is $23$ percent. You can borrow at $8$ percent before taxes. What is the NAL? $($Do not

round intermediate calculations and round your answer to $2$ decimal places, e$.$g$.,$

$32\mathrm{.}16.)$

Answer is complete but not entirely correct.

Should you lease or buy?

Lease

Buy Problem $21-6$ MACRS Depreciation and Leasing

You work for a nuclear research laboratory that is contemplating leasing a diagnostic

scanner $($leasing is a common practice with expensive, high$-$tech equipment$).$ The

scanner costs $$7,200,000,$ Because of radiation contamination, it will actually be

completely valueless in four years. You can lease it for $$2,115,000$ per year for four years.

Assume that the tax rate is $24$ percent. You can borrow at $8$ percent before taxes.

Assume that the scanner will be depreciated as three$-$year property under the MACRS

depreciation. What is the NAL of the lease? $($A negative answer should be indicated by

a minus sign. Do not round intermediate calculations and round your answer to $2$

decimal places, e$.$g$.,32\mathrm{.}16.)$

Answer is complete but not entirely correct. Problem $21-10$ Leasing and Salvage Value

The Wildcat Oil Company is trying to decide whether to lease or buy a new computer$-$

assisted drilling system for its oil exploration business. Management has decided that it

must use the system to stay competitive; it will provide $$4\mathrm{.}8$ million in annual pretax cost

savings. The system costs $$9\mathrm{.}8$ million and will be depreciated straight$-$line to zero

over five years. Wildcat's tax rate is $23$ percent and the firm can borrow at $7$ percent.

Lambert's policy is to require its lessees to make payments at the start of the

year. Suppose it is estimated that the equipment will have an aftertax residual value of

$$1,060,000$ at the end of the lease. What is the maximum lease payment acceptable to

Wildcat? $($Do not round intermediate calculations and enter your answer in dollars, not

millions of dollars, rounded to $2$ decimal places, e$.$g$.,1,234,567\mathrm{.}89.)$

Answer is complete but not entirely correct.Problem $21-3$ Finding the Break$-$Even Payment

You work for a nuclear research laboratory that is contemplating leasing a diagnostic

scanner $($leasing is a common practice with expensive, high$-$tech equipment$).$ The

scanner costs $$5,800,000$ and would be depreciated straight$-$line to zero over five

years. Because of radiation contamination, it will actually be completely valueless in five

years. Assume that the tax rate is $24$ percent. You can borrow at $7$ percent before

taxes. What would the lease payment have to be for both the lessor and the lessee to be

indifferent about the lease? $($Do not round intermediate calculations and round

your answer to $2$ decimal places, e$.$g$.,32\mathrm{.}16.)$

Answer is complete but not entirely correct.Problem $21-12$ Debt Capacity

Montclair Manufacturing is considering leasing some equipment. The annual lease

payment would be $$705,000$ per year for seven years. The appropriate interest rate is $6$

percent and the company is in the $25$ percent tax bracket. What reduction in debt

capacity would occur if the company signs the lease? $($Do not round intermediate

calculations and round your answer to $2$ decimal places, e$.$g$.,32\mathrm{.}16.)$

Answer is complete but not entirely correct.