Chap $21-$ Auter$-$cass $($i$)$

Sanet

Quartz Corporation is a relatively new frm$.$ Ouartz has experienced enough losses during its early years to provide it with at least eight years of tax loss carrpformards,

$2\mathrm{.}5$

polnt

$$ so Quartz's effective tax rate is zero. Ouartz plans to lesse equipment from Nem lewing Company. The term of the lease is flive years. The purchase cost of the equipment is $$775,000.$ New Leasing Company is in the $22$ percent fax bracket. There are no transaction costs to the lease. Fach firm can borrow at $6$ percent.

a$.$ What is Cuartr's reservation price? $($Do net reund intermediste calculations and round your answer to $2$ decimal places, e$.$g$-32\mathrm{.}15.)$

b$.$ What is New Leasing Company's reservation price? $($Do not round intermediate calculations and round your answer to $2$ decimal places, e$\mathrm{.}9.32\mathrm{.}56.)$

$\backslash$table$[[$A$.$ Reservation pice$],[$b$.$ Reservation piloe$]]$