answer both questions please Problem $21-8$ Setting the Lease Payment Problem $21-13$ Setting the Lease Price

An asset costs $$840,000$ and will be depreciated in a straight$-$line manner over its five$-$

year life. It will have no salvage value. The corporate tax rate is $21$ percent and the

appropriate interest rate is $7$ percent.

a$.$ What would the lease payment have to be to make both the lessor and lessee

indifferent about the lease? $($Do not round intermediate calculations and round your

answer to $2$ decimal places, e$.$g$.,32\mathrm{.}16.)$

b$.$ Assume that the lessee pays no taxes and the lessor pays taxes. For what range of

lease payments does the lease have a positive NPV for both parties? $($Enter your

answers from lowest to highest. Do not round intermediate calculations and round

your answers to $2$ decimal places, e$.$g$.,32\mathrm{.}16.)$

Answer is complete but not entirely correct.

Quartz Corporation is a relatively new firm. Quartz has experienced enough losses

during its early years to provide it with at least eight years of tax loss carryforwards,

so Quartz's effective tax rate is zero. Quartz plans to lease equipment from New Leasing

Company. The term of the lease is five years. The purchase cost of the equipment is

$$715,000.$ New Leasing Company is in the $23$ percent tax bracket. There are no

transaction costs to the lease. Each firm can borrow at $8$ percent.

a$.$ What is Quartz's reservation price? $($Do not round intermediate calculations and

round your answer to $2$ decimal places, e$.$g$.,32\mathrm{.}16.)$

b$.$ What is New Leasing Company's reservation price? $($Do not round intermediate

calculations and round your answer to $2$ decimal places, e$.$g$.,32\mathrm{.}16.)$

Answer is complete but not entirely correct.