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Your firm is considering leasing a radiographic x-ray machine. The lease lasts for 3 years. The...

Your firm is considering leasing a radiographic x-ray machine. The lease lasts for 3 years. The lease calls for 4 payments of $25,000 per year with the first payment occurring immediately. The computer would cost $140,000 to buy and would be straight-line depreciated to a zero salvage value over 3 years. The actual salvage value is negligible. The firm can borrow by issuing debt at a rate of 12%. The corporate tax rate is 40%. What is the NPV of the lease relative to the purchase?

A. -$125,000

B. $115,412

C. $75,000

D. $125,000

E. None of these For accounting purposes,

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jeff jeffy answered 2 years ago
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