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I need help with questions 8, 9, and 10. Thanks. ce the following information to work Problems 8 through 10. The Wildcat Oil Company is

image text in transcribedI need help with questions 8, 9, and 10. Thanks.

ce the following information to work Problems 8 through 10. The Wildcat Oil Company is trying to decide whether to lease or buy a new computer-assisted drilling system for its oil exploration busi- ness. Management has already determined that acquisition of the system has a positive NPV. The system costs $9.4 million and qualifies for a 25 percent CCA rate. The equipment will have a $975,000 salvage value in 5 years. Wildcat's tax rate is 36 percent, and the firm can borrow at 9 percent. Southtown Leasing Company has offered to lease the drilling equipment to Wildcat for payments of $2.15 million per year. Southtown's policy is to require its lessees to make payments at the start of the year. 8. Lease or Buy (L04) What is the NAL for Wildcat? What is the maximum lease payment that would be acceptable to the company? 19.) Leasing and Salvage Value (L04) Suppose it is estimated that the equipment will have no salvage value at the end of the lease. What is the maximum lease payment acceptable to Wildcat now? 10. Deposits in Leasing (L04) Many lessors require a security deposit in the form of a cash payment or other pledged collateral. Suppose Southtown requires Wildcat to pay a $750,000 security deposit at the inception of the lease. If the lease payment is still $2,150,000 a year, is it advantageous for Wildcat to lease the equipment now

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