A lessor will charge $30,500 a year for a five year lease on equipment costing $136,000. The equipment has a 5 year life after which time it will be worthless. The lessee uses straight-line depreciation, has a tax rate of 21 percent, and borrows money at 8 percent. What is the net advantage to leasing?

a) $10,574

b) $5,507

c) $12,638

d) $6,283

e) $11,528