Answer the following question:

Information has been gathered for a lease:

• The fair value of the equipment is $700,000 at the inception of the lease
• The lease term is 5 years
• Annual lease payments are $145,000 per year. Payments are due at the beginning of each lease year
• The lessee is offered a purchase option for the asset for $18,000 at the end of the lease term which is expected to be exercised
• The lease payments include the cost of insurance, estimated at $12,000 per year
• The lessor's implicit rate of interest in the lease is 6% and is known to the lessee. The lessee's incremental borrowing rate is 8%

Calculate the present value of the right-of-use asset.

Answer: 593860 + 13451 = 607311

Use excel and show all work formulas used.