Average Leasing Company entered into a direct financing lease with a lessee, Lenny Company. The lease agreement calls for five equal annual payments of $55,000 at the beginning of each year with the first payment due on January 1, 2016. The leased property has an estimated residual value of $5,000, which Lenny does not guarantee. The property remains the property

average company the end of the lease term. Average desires a 12% rate of return. Present value factors for a 12% interest rate are as follows:

Present value of $1 for n = 1 0.892857 Present value of $1 for n = 5 0.567427

Present value of an ordinary annuity for n = 5 3.604776

Present value of an annuity due for n = 5 4.037349

what is the cost of the leased property to average company?