You work for a nuclear research laboratory that is contemplating leasing a diagnostic scanner ( leasing is
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Question:
You work for a nuclear research laboratory that is contemplating leasing a diagnostic scanner leasing is a common practice with expensive, hightech equipment The scanner costs $ and would be depreciated straightline to zero over four years. Because of radiation contamination, it will actually be completely valueless in four years. You can lease it for $ per year for four years. Assume the tax rate is percent. The borrowing rate is percent before taxes. Your company does not expect to pay taxes for the next several years, but the leasing company will pay taxes. Over what range of lease payments will the lease be profitable for both parties?
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