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Can you answer this in as much detail as possible please You work for a nuclear research laboratory that is contemplating leasing a diagnostic scanner.
Can you answer this in as much detail as possible please
You work for a nuclear research laboratory that is contemplating leasing a diagnostic scanner. The scanner costs $1,053,000 and qualifies for a 30% CCA rate. Because of contamination, the scanner will be completely valueless in four years. You can lease it for $315,000 per year for four years. Assume that this is the only asset in this CCA asset pool and that the asset pool is terminated at the end of the project. Lease payments are made at the beginning of the year. a. Assume that the tax rate is 40%. You can borrow at 7% pre-tax. Should you lease or buy? b. What are the cash flows and the NPV from the lease from the lessor's viewpoint? Assume a 40% tax bracket. What would the lease payments have to be for both lessor and lessee to be indifferent to the lease? c. Assume that your company does not contemplate paying taxes for the next several years. What are the cash flows and NPV from leasing in this case? What is your indifference lease payment in this case? You work for a nuclear research laboratory that is contemplating leasing a diagnostic scanner. The scanner costs $1,053,000 and qualifies for a 30% CCA rate. Because of contamination, the scanner will be completely valueless in four years. You can lease it for $315,000 per year for four years. Assume that this is the only asset in this CCA asset pool and that the asset pool is terminated at the end of the project. Lease payments are made at the beginning of the year. a. Assume that the tax rate is 40%. You can borrow at 7% pre-tax. Should you lease or buy? b. What are the cash flows and the NPV from the lease from the lessor's viewpoint? Assume a 40% tax bracket. What would the lease payments have to be for both lessor and lessee to be indifferent to the lease? c. Assume that your company does not contemplate paying taxes for the next several years. What are the cash flows and NPV from leasing in this case? What is your indifference lease payment in this caseStep by Step Solution
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