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