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Wildcat Oil Company is trying to decide whether to lease or buy a new computer system. The system would cost $6.7 million that would be

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Wildcat Oil Company is trying to decide whether to lease or buy a new computer system. The system would cost $6.7 million that would be depreciated straight-line to zero over its 4-year life and would provide $1.2 million in annual pretax cost savings. Wildcat's tax rate is 21 percent and its pretax borrowing cost is 9 percent. Lambert Leasing has offered to lease the system to Wildcat for payments of $1,850,000 per year for four years. Lambert's requires its lease payments to be paid at the beginning of each year. Lambert would also require Wildcat to pay a refundable $270,000 security deposit at the inception of the lease. What is the NAL of leasing the system? Multiple Choice $141,287 a $157,395 O O $60,318 O $138,828 O $134,719

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