calculate  the maximum lease payment that the lessee would be willing to pay?

	from the MODEL-GENERATED DATA section.
	INPUT DATA:				KEY OUTPUT:
	General Data:				Lessee:
	Invoice price		$3,000,000		NAL	$119,395
	Annual lease payment		$675,000		IRR	7.0%
	Net revenue per procedure		$10,000
	Per procedure lease payment	$7,000	Lessor:
	For Lessee Only:				Unleveraged lease:
						NPV	$149,108
	Maintenance contract cost		$100,000		IRR	6.9%
	Loan interest (discount) rate		9.0%
	Estimated residual value		$1,200,000	Leveraged lease:
	Residual value discount rate	9.0%		NPV	$181,170
	Tax rate			0.0%		IRR	14.5%
	For Lessor Only:				Per Procedure Versus Annual Lease:
					(Volume = procedures annually)
	Maintenance contract cost		$100,000
	Opportunity cost rate		8.0%			Profit
	Estimated residual value		$1,600,000	Per procedure lease	$300,000
	Residual value discount rate	8.0%	Annual lease	325,000
	Tax rate			40.0%	Difference	($25,000)
	Leveraged lease inputs:
	Amount borrowed		$1,500,000
	Interest rate		7.0%
	MODEL-GENERATED DATA:
	MACRS Depreciation Table:
		MACRS		Depreciation	Ending
	Year	Rate	Basis	Expense	Book Value
	1	0.20	$3,000,000	$600,000	$2,400,000
	2	0.32	3,000,000	960,000	1,440,000
	3	0.19	3,000,000	570,000	870,000
	4	0.12	3,000,000	360,000	510,000
	5	0.11	3,000,000	330,000	180,000
	6	0.06	3,000,000	180,000	0
				$3,000,000
	Lessee's Annual Analysis:
	Base Discount Rate:			9.0%
	Residual Value Discount Rate:			9.0%
	Cost of Owning:
			Year 0	Year 1	Year 2	Year 3	Year 4
	Equipment cost	($3,000,000)
	Maintenance	(100,000)	($100,000)	($100,000)	($100,000)
	Maint tax savings	0	0	0	0
	Depreciation shield		0	0	0	$0
	Residual value					1,200,000
	Residual value tax					0
	Net owning CF	($3,100,000)	($100,000)	($100,000)	($100,000)	$1,200,000
	PV cost owning:	($2,503,019)
	Cost of Leasing:
	Lease payment	($675,000)	($675,000)	($675,000)	($675,000)
	Payment tax savings	0	0	0	0
	Net leasing CF	($675,000)	($675,000)	($675,000)	($675,000)	$0
	PV cost leasing:	($2,383,624)
	NAL = PV cost of leasing - PV cost of owning =	$119,395
	Net Cost of Leasing versus Owning:
	Lease CF - Own CF	$2,425,000	($575,000)	($575,000)	($575,000)	($1,200,000)
			Lessee's IRR =	7.0%
	Lessor's Annual Analysis:
	Base Discount Rate:			4.8%
	Residual Value Discount Rate:			4.8%
		Cash Flow Analysis:
			Year 0	Year 1	Year 2	Year 3	Year 4
	Equipment cost	($3,000,000)
	Maintenance	(100,000)	($100,000)	($100,000)	($100,000)
	Maint tax savings	40,000	40,000	40,000	40,000
	Depreciation shield		240,000	384,000	228,000	$144,000
	Lease payment	675,000	675,000	675,000	675,000
	Tax on payment	(270,000)	(270,000)	(270,000)	(270,000)
	Residual value					1,600,000
	Residual value tax					(436,000)
	Net cash flow	($2,655,000)	$585,000	$729,000	$573,000	$1,308,000
			Lessor's NPV =	$149,108
			Lessor's IRR =	6.9%
	Leveraged Lease:
			Year 0	Year 1	Year 2	Year 3	Year 4
	Unleveraged CF	($2,655,000)	$585,000	$729,000	$573,000	$144,000	All except RV flows
	Unleveraged CF					1,164,000	RV flows
	Loan amount	1,500,000
	Interest			(105,000)	(105,000)	(105,000)	(105,000)
	Int tax savings		42,000	42,000	42,000	42,000
	Principal repay					(1,500,000)
	Net cash flow	($1,155,000)	$522,000	$666,000	$510,000	($255,000)
			Lessor's NPV =	$181,170
			Lessor's IRR =	14.5%
	Lease Payment Analysis Graphics Data:
	(Note: This table does NOT automatically recalculate when input values are changed.)
			Lessee's	Lessor's	Total
		Lease Payment	NAL	NPV	Value
		$600,000	$0	$0	$0
		$620,000	$0	$0	$0
		$640,000	$0	$0	$0
		$660,000	$0	$0	$0
		$680,000	$0	$0	$0
		$700,000	$0	$0	$0
		$720,000	$0	$0	$0
	Lessee's Per Procedure Analysis:
		Per Procedure Lease			Annual Lease
	Num	Annual	Annual		Annual	Annual
	of	Lease	Net	Annual	Lease	Net	Annual	Profit
	Proc	Payment	Revenue	Profit	Payment	Revenue	Profit	Difference
	70	$490,000	$700,000	$210,000	$675,000	$700,000	$25,000	$185,000
	80	$560,000	$800,000	$240,000	$675,000	$800,000	$125,000	$115,000
	90	$630,000	$900,000	$270,000	$675,000	$900,000	$225,000	$45,000
	100	$700,000	$1,000,000	$300,000	$675,000	$1,000,000	$325,000	($25,000)
	110	$770,000	$1,100,000	$330,000	$675,000	$1,100,000	$425,000	($95,000)
	120	$840,000	$1,200,000	$360,000	$675,000	$1,200,000	$525,000	($165,000)
	130	$910,000	$1,300,000	$390,000	$675,000	$1,300,000	$625,000	($235,000)
								END