Question
You work for a medical research laboratory that is contemplating leasing a diagnostic scanner ( leasing is a common practice with expensive, high tech equipment).
You work for a medical research laboratory that is contemplating leasing a diagnostic scanner ( leasing is a common practice with expensive, high tech equipment). The scanner cost 4,500,00 euros and it would be depreciated straight-line to zero over five years. Because of radiation contamination, the scanner will be worthless in four years. You can lease the scanner for 1,000,00 euro per year for five years. You can borrow at 7 percent before taxes. Assume that the tax rate is 25 percent. a. Create a lease-versus-buy analysis. Calculate the NPV of leasing. Should you lease or buy? (10 points)
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