An asset costs $675,000. The CCA rate for this asset is 25%. The assets useful life is 2 years after which it will be worth $50,000. The corporate tax rate is 35% and the interest rate on risk-free cash flow is 10%.

Assuming the lessee pays no taxes and lessor is in the 35% tax bracket, for what range of lease payments does the lease have a positive NPV for both parties?

a) $365,119 - $389,878

b) There is no range over which a lease is beneficial to both lessee and lessor

c) $123,454 - $237,765

d) $434,339 - $497,009

b is correct