You work for a nuclear research laboratory that is contemplating leasing a diagnostic scanner (leasing is a common practice with expensive, high-tech equipment). The scanner costs $7,890,000, and it would be depreciated straight-line to zero over four years. Because of radiation contamination, it will actually be completely valueless in four years. You can lease it for $2,375,000 per year for four years. Assume the tax rate is 35 percent.

Suppose the entire $7,890,000 purchase price of the scanner is borrowed. The rate on the loan is 8 percent, and the loan will be repaid in equal installments.

Calculate the amount of annual loan repayment. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Payment

$

Complete the schedules given below and calculate the NAL. (A negative answer should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

Amortization
	Beginning	Total	Interest	Principal	Ending
Year	Balance	Payment	Payment	Payment	Balance
1	$	$	$	$	$
2
3
4

Cash flows
	Aftertax			Total
Year	Loan Payment	OCF		Cash Flow
1	$	$	=	$
2			=
3			=
4			=

NAL

$