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 $6.3 million and it qualifies for a 45 percent CCA rate. Because of radiation contamination, it is valueless in four years. You can lease it for $1.875 million per year for four years. Assume that assets pool remains open and payments are made at the end of the year. Assume the tax rate is 37 percent. You can borrow at 8 percent pre-tax.

Calculate NAL. (Enter the answer in dollars and not in millions of dollars. Do not round intermediate calculations. Round the final answer to 2 decimal places.)

NAL

$

Should you lease or buy?

	Buy
	Lease