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Witten Entertainment is considering buying a machine that costs $556,000. The machine will be depreciated over...

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Finance

Witten Entertainment is considering buying a machine that costs$556,000. The machine will be depreciated over four years by thestraight-line method and will be worthless at that time. Thecompany can lease the machine with year-end payments of $150,000.The company can issue bonds at an interest rate of 7 percent. Thecorporate tax rate is 21 percent.

What is the NAL of the lease? (A negative answer should beindicated by a minus sign. Do not round intermediate calculationsand round your answer to 2 decimal places, e.g., 32.16.)

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3.6 Ratings (626 Votes)
Solution The NAL of the lease 3868235Note The discount rate used in the    See Answer
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