What are the nal and the irr of the lease


Here is a managerial finance question? Roninsons Memorial Hospital wants to install a $1.5 million computer. It plans to use the computer for 3 years and replace it with a new system. the company has a 10% bank loan it can obtain for the computer or lease the computer for 3 years. here are the facts: The computer falls into the 3-year class for tax depreciation, so the MACRS allowances are 0.33,0.45,0.15, and o.07 in years 1 through 4, respectively. the marginal tax rate is 34%. tentative lease terms for payments of $500,00 at the end of each year. the salvage value for the computer is $300,000. What are the NAL and the IRR of the lease? Interprete each value.

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Accounting Basics: What are the nal and the irr of the lease
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