Schaad Corporation Has Entered into an 8 Year Lease for a Piece

Multiple Choice

Schaad Corporation has entered into an 8 year lease for a piece of equipment. The annual payment under the lease will be $2,500, with payments being made at the beginning of each year. If the discount rate is 14%, the present value of the lease payments is closest to:

A) $20,000
B) $7,011
C) $17,544
D) $14,097