You work for a nuclear research laboratory that is contemplating leasing a diagnostic scanner (leasing is a very common practice with expensive, high-tech equipment). The scanner costs $5,800,000. Because of radiation contamination, it actually will be completely valueless in four years. You can lease it for $1,690,000 per year for four years. Assume that the tax rate is 25 percent. You can borrow at 7 percent before taxes. Assume that the scanner will be depreciated as three-year property under MACRS. Use Table 10.7.

a.	What is the NAL of the lease? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
b.	Should you lease or buy?

a.	NAL.	?
b.

Table 10.7 Modified ACRS Depreciation Allowances

Property Class
Year	ThreeYear	FiveYear	SevenYear
1	33.33%	20.00%	14.29%
2	44.45	32.00	24.49
3	14.81	19.20	17.49
4	7.41	11.52	12.49
5		11.52	8.93
6		5.76	8.92
7			8.93
8			4.46