Big sky hospital plans to obtain a new MRI that costs $1.5 million and has an estimated four year useful life. It can obtain a bank loan for the entire amount and buy the MRI, or it can lease the equipment. Assume that the following facts apply to the decsion: -- the MRI falls into three year class for tax depreciation, so the MACRS allowance are 0.33, 0.45, 0.15 and 0.07 in years 1 through 4, respectively. -- estimated maintenance expenses are $ 75,000 payable at the beginning of each year whether the MRI is leased or purchased. -- Big Sky's marginal tax rate is 40 percent. -- the bank loan would have an interest rate of 15 percent. -- if leased, the lease(rental) payments would be $400,000 payable at the end of each of the next four years. -- the estimated residual(and salvage) value is $250,000. a. what are the NAL nad IRR of the lease? Interpret each value. b. assume now that the salvage value estimate is $300,000, but all other facts remain the same. What is the new NAL? The new IRR