In: Finance
You work for a nuclear research laboratory that is contemplating leasing a diagnostic scanner (leasing is a very common practice with expensive, high-tech equipment). The scanner costs €4,800,000, and it would be depreciated straight-line to zero over four years. Because of radiation contamination, it actually will be completely valueless in four years. You can lease it for €1,430,000 per year for four years. You can borrow at 8 percent before taxes. Assume that the tax rate is 21 percent.
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