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 $6,400,000 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 $1,930,000 per year for four years. Assume the tax rate is 25 percent.

Suppose the entire $6,400,000 purchase price of the scanner is borrowed. The rate on the loan is 9 percent and the loan will be repaid in equal installments. Calculate the amount of the annual loan repayment.

Complete the schedules given below and calculate the NAL

Year	Beginning Balance	Total Payment	Interest Payment	Principal Payment	Ending Balance
1
2
3
4

Year	Aftertax Loan Payment	OCF		Total Cash Flow
1			=
2			=
3			=
4			=

NAL: