Question: Your company is considering leasing a high - tech manufacturing machine. The machine costs 4 . 8 million and would be depreciated straight line to

Your company is considering leasing a high-tech manufacturing machine. The machine costs 4.8million and would be depreciated straightline to zero over 5 years. The machine will be worth less after 5 years. The lessor pays the machine 4.8 million. The lessor offer sale as payment of 1.1 million per year for 5 years. Assume a 25% tax rate, and your company can borrow at 8% before taxes. a. Calculate the Net Advantage to Leasing (NAL) from your company's perspective. (7 marks) b. What is the NAL from the lessor's viewpoint? (3 marks) c. Determine the breakeven lease payment that would make both parties indifferent to leasing. (5 marks)

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