Problem $21-8$ Setting the Lease Payment

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.