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Tok Dalang works for a nuclear research laboratory that is contemplating leasing a diagnostic scanner. The scanner costs RM5,800,000 and it would be depreciated straight
Tok Dalang works for a nuclear research laboratory that is contemplating leasing a diagnostic scanner. The scanner costs RM5,800,000 and it would be depreciated straight line to zero over four years. Because of radiation contamination, it will be completely valueless in four years. Tok Dalang can lease it for RM1,740,000, payable at the beginning of each of the next four years. Assume that the tax rate is 30%. Tok Dalang can borrow at 8% before tax. Based on the above information, you are required to prepare the Cash Flows Analysis by showing clearly the Net Advantage of Leasing (NAL). Based on NAL, recommend to Tok Dalang whether he should lease or buy the scanner. (12 Marks)
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