Witten Entertainment is considering buying a machine that costs $561,000. The machine will be depreciated over four years by the straight-line method and will be worthless at that time. The company can lease the machine with year-end payments of $174,000. The company can issue bonds at an interest rate of 6 percent. The corporate tax rate is 21 percent. What is the NAL of the lease? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) NAL C
Witten Entertainment is considering buying a machine that costs $561,000. The machine will be depreciated over four years by the straight-line method and will be worthless at that time. The company can lease the machine with year-end payments of $174,000. The company can issue bonds at an interest rate of 6 percent. The corporate tax rate is 21 percent. What is the NAL of the lease? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) NAL C
Chapter19: Lease And Intermediate-term Financing
Section: Chapter Questions
Problem 9P
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Question
![Witten Entertainment is considering buying a machine that costs $561,000. The machine
will be depreciated over four years by the straight-line method and will be worthless at
that time. The company can lease the machine with year-end payments of $174,000. The
company can issue bonds at an interest rate of 6 percent. The corporate tax rate is 21
percent.
What is the NAL of the lease? (A negative answer should be indicated by a minus sign.
Do not round intermediate calculations and round your answer to 2 decimal places,
e.g., 32.16.)
NAL](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F7ddf1e52-17d0-47a9-956c-00bd0ce93716%2F46be33a4-f921-4fae-87c3-ab5a6fcbd01c%2Fihurovb_processed.png&w=3840&q=75)
Transcribed Image Text:Witten Entertainment is considering buying a machine that costs $561,000. The machine
will be depreciated over four years by the straight-line method and will be worthless at
that time. The company can lease the machine with year-end payments of $174,000. The
company can issue bonds at an interest rate of 6 percent. The corporate tax rate is 21
percent.
What is the NAL of the lease? (A negative answer should be indicated by a minus sign.
Do not round intermediate calculations and round your answer to 2 decimal places,
e.g., 32.16.)
NAL
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