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 $$4,850,000,$ and it 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 $$1,485,000$ per year for

four years. Assume that the tax rate is $35$ percent. You can borrow at $9$ percent before taxes. Assume that lease payments are made at

the end of the year.

a$.$ Calculate the NPV$.($Do not round intermediate calculations. Round the final answer to $2$ decimal places. Omit $ sign in your

response.$)$

NPV $,$$

b$.$ Should you lease or buy?

Buy

Lease