Question: A medical center is considering to add one new anesthesia system. The info. about buying versus lease options are as follows: The system costs $920,000,

A medical center is considering to add one new anesthesia system. The info. about buying versus lease options are as follows: The system costs $920,000, and it would be depreciated straight-line to zero over 10 years, after that it will be too outdated and worthless. If the center goes with lease option, lease expense would be $266,800 per year for 10 years. Tax rate is 38% . The medical center's riskless borrowing rate is 13% before taxes.

What is aftertax lease payment $

What is annual depreciation tax shield $

What is discount rate for this lease choice question %

What is net advantage of lease (NAL) for this question ?

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