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$$s effective tax rate is zero. Quartz plans to lease equipment from New Leasing Company. The term of the lease is six years. The purchase cost of the equipment is $$850,000.$ New Leasing Company is in the $22$ 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$.,32\mathrm{.}16.)$