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Big Sky Hospital plans to obtain a new MRI that costs $ 1 . 5 million and has an estimated four - year useful life.
Big Sky Hospital plans to obtain a new MRI that costs $ million and has an estimated fouryear useful life. It can obtain a bank loan for the entire amount and buy the MRI or it can lease the equipmentAssume that the following facts apply to the decision: The MRI falls into the threeyear class for tax depreciation, so the MACRS allowances are and in Years through respectively Estimated maintenance expenses are $ payable at the beginning of each year whether the MRI is leased or purchased Big Skys marginal tax rate is percent Big Skys cost of debt is percent leased, the lease rental payments would be $ payable at the end of each of the next four years The estimated residual and salvage value is $ What is the of the lease? Note: Format is if positiveif negative What is the IRR of the lease? NoteFormat is if positive if negative
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