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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

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 $2,000,000 and it would be depreciated straight-line to zero over 4 years. Because of radiation contamination, it will actually be completely valueless in 4 years. You can lease it for $600,000 per year for 4 years. Assume the tax rate is 33 percent. You can borrow at 7 percent before taxes. What would the lease payment have to be for both lessor and lessee to be indifferent about the lease?

A. $394,967.69 B. $618,979.22 C. $635,009.3 D.$589,504.02 E.$560,028.82

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