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Wolfson Corporation has decided to purchase a new machine that costs $ 4 . 3 million. The machine will be depreciated on a straight -
Wolfson Corporation has decided to purchase a new machine that costs $ million. The machine will be depreciated on a straightline basis and will be worthless after four years. The corporate tax rate is percent. The Sur Bank has offered Wolfson a fouryear loan for $ million. The repayment schedule is four yearly principal repayments of $ and an interest charge of percent on the loan's outstanding balance at the beginning of each year. Both principal repayments and interest are due at the end of each year. Cal Leasing Corporation offers to lease the same machine to Wolfson. Lease payments of $ per year are due at the beginning of each of the four years of the lease. a What is the NAL of leasing for Wolfson? b What is the maximum annual lease Wolfson would be willing to pay?
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