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 that payments are made at the end of year, what set of lease payments will make the lessee and lessor equally well off?

a) $488,321

b) $503,985

c) $296,113

d) $389,878 (CORRECT ANSWER)