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You work for a nuclear research laboratory that is contemplating leasing a diagnostic scanner (leasing is very 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 very common practice with expensive, high-tech equipment). The scanner costs $6,000,000, and it would be depreciated straight-line to zero over five years. Because of radiation contamination, it actually will be completely valueless in five years. You can lease it for $1,450,000 per year for five years. Assume that the tax rate is 25 percent. You can borrow at 7 percent before taxes. What is the NAL of the lease? Should you lease or buy?

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