Sutton Corporation, which has a zero tax rate due to tax loss carry-forwards

Sutton Corporation, which has a zero tax rate due to tax loss carry-forwards, is considering a 5-

year, $6,000,000 bank loan to finance service equipment. The loan has an interest rate of 10%

and would be amortized over 5 years, with 5 end-of-year payments. Sutton can also lease the

equipment for 5 end-of-year payments of $1,790,000 each. How much larger or smaller is the

bank loan payment than the lease payment? Note: Subtract the loan payment from the lease

payment.