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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 $5,500,000, and it would be depreciated straight-line to zero over four years. Because of radiation contamination, it actually will be completely valueless in four years. You can borrow at 7 percent before taxes. Your company does not anticipate paying taxes for the next several years, but the leasing company has a tax rate of 25 percent. Over what range of lease payments will the lease be profitable for both parties?

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