Nu-Tek is considering leasing some equipment for 4 years with equal annual lease payments. The...
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Nu-Tek is considering leasing some equipment for 4 years with equal annual lease payments. The equipment would cost RM740,000 to buy and would be depreciated as a heavy machinery item using the schedule in Table 1. The actual salvage value is zero. The applicable pretax borrowing rate is 7.3 percent. The lessee does not expect to owe taxes for several years while the lessor's tax rate is 21 percent. What is the range of lease payments that will be acceptable to both parties?
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