Question: e COC COC c 1. ffSEGGMBOC 14 5 5+ ezto.mheducation.com/hm.tpx B + Q Suppose that National Waferonics has before it a proposal for a

e COC COC c 1. ffSEGGMBOC 14 5 5+ ezto.mheducation.com/hm.tpx B + Q Suppose that National Waferonics has before it a proposal for a

e COC COC c 1. ffSEGGMBOC 14 5 5+ ezto.mheducation.com/hm.tpx B + Q Suppose that National Waferonics has before it a proposal for a four-year financial lease. The firm constructs a table with cash flow consequences by accepting the lease contract rather than purchasing the machine. The bottom line of its table shows the lease cash flows (figures in dollars): Year 0 Lease cash flow + 62,100 1. -25,700 2 -21,600 -20,800 These flows reflect the cost of the machine, CCA tax shields, and the after-tax lease payments. Ignore salvage value. Assume the firm could borrow at 11% and faces a 35% marginal tax rate. a. What is the value of the equivalent loan? (Round your answer to the nearest cent.) Value of the equivalent loan S f2 b. What is the value of the lease? (Round your answer to the nearest cent.) Value of the lease S c. Suppose the machine's NPV under normal financing is $3.000. Should National Waferonics invest? (Click to select) d. Should it sign the lease? Desktop OneDrive hp Address HD Webcam HD HD Video Conferencing 33G G Links f3 O f4 f5 f6 insert f7 f8 f9 f10 f11 f12 delete Scroll S % & + backspace de cc cc f cc cc f f SS as C 8 14 5 6 ezto.mheducation.com/hm.tpx 2. HD + Nodhead College needs a new computer. It can either buy it for $330,000 or lease it from Compulease. The lease terms require Nodhead to make six annual payments (prepaid) of $77,000. Nodhead pays no tax. Compulease pays tax at 30%. Compulease can depreciate the computer for tax purposes at a CCA rate of 35%, and will close the asset pool at the end of the 6th year. The computer will have no residual value at the end of year 5. The interest rate is 11%. a. What is the NPV of the lease for Nodhead College? (Round your answer to the nearest dollar.) U NPV $ b. What is the NPV for Compulease? (Round your answer to the nearest dollar.) NPV $ enter loss, if any.) c. What is the overall gain from leasing?(Round your answer to the nearest dollar. Use minus sign to Overall gain (loss) $ ||Desktop OneDrive hp HD Webcam HD Video Conferencing 0 ||Address Links

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