The Wildcat OIl Company is trying to decide whether to lease or buy a new...
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The Wildcat OIl Company is trying to decide whether to lease or buy a new computer assisted drilling system for its oil exploration business. Management has decided that it must use the system to stay competitive; It will provide $ million in annual pretax cost savings. The system costs $ million and will be depreclated straightline to zero over five years. Wildcat's tax rate is percent and the firm can borrow at percent. Lambert's policy is to require its lessees to make payments at the start of the year. Suppose it is estimated that the equipment will have an aftertax residual value of $ at the end of the lease. What is the maximum lease payment acceptable to Wildcat? Do not round Intermedlate calculations and enter your answer In dollars, not millions of dollars, rounded to decimal places, eg 
The Wildcat OIl Company is trying to decide whether to lease or buy a new computer
assisted drilling system for its oil exploration business. Management has decided that it
must use the system to stay competitive; It will provide $ million in annual pretax cost
savings. The system costs $ million and will be depreclated straightline to zero over
five years. Wildcat's tax rate is percent and the firm can borrow at percent.
Lambert's policy is to require its lessees to make payments at the start of the year.
Suppose it is estimated that the equipment will have an aftertax residual value of
$ at the end of the lease. What is the maximum lease payment acceptable to
Wildcat? Do not round Intermedlate calculations and enter your answer In dollars, not
millions of dollars, rounded to decimal places, eg
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