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You work for a nuclear research laboratory that is contemplating leasing a diagnostic scanner (leasing is a common practice with expensive, high-tech equipment). The scanner

You work for a nuclear research laboratory that is contemplating leasing a diagnostic scanner (leasing is a common practice with expensive, high-tech equipment). The scanner costs $6.26 and would be depreciated straight-line to zero over four years. Because of radiation contamination, it will actually be completely valueless in four years. You can lease it for $1718215 per year for four years. Assume that the tax rate is 30%. You can borrow at 10.72% before taxes. What would be the cashflows for the leasee? HINT: Determine the cashflows if you lease, and send those cash flows to the present. Remember that the cash flows are negative as the leasee is paying.

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