Southern First Bank is considering a leveraged lease agreement involving MRI equipment with Prisma Hospital. The bank (40 percent tax

bracket) will be the lessor; Prisma Hospital, the lessee (0 percent tax bracket); and a large South Carolina pension fund, the lender. Prisma

is seeking $40 million, and the pension fund has agreed to lend the bank $20 million at 9 percent. The bank has agreed to repay the

pension fund $2 million of principal each year plus interest. (The remaining balance will be repaid in a balloon payment at the end of the

5th year.) The equipment will be depreciated on a straight-line basis over a 5-year estimated useful life with no expected salvage value.

Assuming that Prisma has agreed to annual lease payments of $8 million, calculate the bank's cash outflow at time 0.

Your answer should have four decimal places. For example, for $10,000,000, enter 10,000,000.0000.

Question 33

5 pts

... Continued from the previous question.

Calculate the bank's cash outflow at time 1.

Your answer should have four decimal places. For example, for $10,000,000, enter 10,000,000.0000.