A&D is considering leasing a new equipment. The lease lasts for 5 years. The lease calls for 5 payments of $9,700 per year with the first payment occurring immediately. The equipment would cost $41,000 to buy and would be straight-line depreciated to a zero salvage value over 5 years. The actual salvage value is negligible because of technological obsolescence. The firm can borrow at a rate of 7%. The corporate tax rate is 25%. What is the NPV of the lease relative to the purchase if the asset had a residual value of $1,200 (ignoring any possible risk differences)?

		$1,316.84
		-$1,137.80
		-$1,219.73
		-$986.27
		-$1,433.95