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I am trying to calculate the NAL of a lease from t...

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I am trying to calculate the NAL of a lease from the following information. I know the answer is $108,048 but can't get the right calculation to get to the answer. equipment cost = $1.5 million Can obtain a bank loan for 100% of the purchase price or the equipment can be leased. Assume the following facts: (1) The machinery falls into the MACRS 3-year class. (2) Under either the lease or the purchase, Big Sky must pay for insurance, property taxes, and maintenance. (3) The firm's tax rate is 40%. (4) The loan would have an interest rate of 15%. (5) The lease terms call for $400,000 payments at the end of each of the next 4 years. (6) Assume that Big Sky Mining has no use for the machine beyond the expiration of the lease. The machine has an estimated residual value of $250,000 at the end of the 4th year.

 

Paper#8690 | Written in 18-Jul-2015

Price : $25
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