Ballentine Inc.,which has a zero tax rate due to tax loss carry-forwards,is considering a 6-year,$5,000,000 bank loan in order to buy a new piece of equipment.The loan will be amortized over 6 years with end-of-year payments and has an interest rate of 9%.Alternatively,Ballentine can also lease the equipment for an end-of-year payment of $1,250,000.By how much does the lease payment exceed the loan payment?

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The Answer of Ballentine Inc.,which has a zero tax rate due to tax loss carry-forwards,is considering a 6-year,$5,000,000 bank loan in order to buy a new piece of equipment.The loan will be amortized over 6 years with end-of-year payments and has an interest rate of 9%.Alternatively,Ballentine can also lease the equipment for an end-of-year payment of $1,250,000.By how much does the lease payment exceed the loan payment?