Question: You work for a nuclear research laboratory that is contemplating leasing a diagnostic scanner (leasing is a very common proactive with expensive, high-tech equipment). The

 You work for a nuclear research laboratory that is contemplating leasing

You work for a nuclear research laboratory that is contemplating leasing a diagnostic scanner (leasing is a very common proactive with expensive, high-tech equipment). The scanner costs $7,900,000. Because of radiation contamination, it will actually be completely valueless in four years. You can lease it for $2,75,000 per year for four years. Assume that the tax rate is 35 percent. you can borrow at 6 percent before taxes. Assume that the scanner will be depreciated as three-year property under MACRS. Should you lease or buy? Leased Buy

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