(Appendix 8A)(Ignore Income Taxes in This Problem

Multiple Choice

(Appendix 8A) (Ignore income taxes in this problem. ) 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