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 $6,400,000. Because of radiation contamination, it actually will be completely valueless in four years. You can lease it for $1,825,000 per year for four years. Assume that the tax rate is 21 percent. You can borrow at 6 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?
b.	Should you lease or buy?

Property ClassYearThreeYearFiveYearSevenYear133.33%20.00%14.29%244.4532.0024.49314.8119.2017.4947.4111.5212.495 11.528.936 5.768.927 8.938 4.46