Step 4 - Calculate the lease tax savings
	Lease payment		$0
	Tax rate		0%
	Lease tax savings		$0
Step 5 - Map the net cash flows associated with owning:
			Year 0	Year 1	Year 2	Year 3	Year 4
Cost of owning:
Net purchase price			$0
Depreciation tax savings				$0	$0	$0	$0
Residual value							$0
Tax on residual value							$0
Net cash flow			$0	$0	$0	$0	$0

HCA Mission Healthcare needs a piece of diagnostic equipment that costs $1 million. Mission

can either lease the equipment or borrow $1 million from a local bank and buy the equipment.

Mission's tax rate is 30 percent, and the equipment falls into the three year class. If Mission

leases the equipment, the payment would be $260 thousand per year for four years, payable at

the beginning of each year. If Mission borrows and buys, its bank would charge 6 percent

interest (compounded annually) on the loan. Should Mission buy or lease the equipment?