LNZ Corp. is thinking about leasing equipment to make tinted lenses. This equipment would cost

$$3,400,000$ if purchased. The CCA rate on the equipment is $40\%$ and the salvage value after its

five$-$year life will be $$350,000.$ There are no capital gains to worry about. The firm's corporate tax

rate is $40\%$ and its pre$-$tax cost of debt is $12\%.$ WeLease Corp. has offered to lease the system to

LNZ for payments of $$710,000$ per year for five years. These lease payments would be made at

the START of the year. Assume that the tax deductibility benefit of the lease payments occurs at

the same time the lease payments are made.

$8.$ What is the present value of the after$-$tax lease payments?

A$)$ $$1,737,390$

B$)$ $$2,895,617$

C$)$ $$1,862,461$

D$)$ $$1,719,911$

E$)$ $$2,866,518$

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$9.$ Pretend that your answer to the previous question was exactly $$2,000,000.$ If the present value

of the CCA tax shield on the equipment is $$1,030,032,$ what would be the NAL for LNZ$?$

A$)$ $$385,372$

B$)$ $$122,742$

C$)$ $$402,831$

D$)-$$$772,875$

E$)$ $$369,968$