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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 -

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 $5,700,000. Because of radiation contamination, it actually will be completely valueless in four years. You can lease it for $1,665,000 per year for four years. Assume that the tax rate is 24 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?
b. Should you lease or buy?
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