On April 1, 20x1, the Plymouth Finance Company leased equipment having a fair market value of $345,000 to Chestnut Hill Enterprises. The carrying value of the equipment in Plymouth's inventory was $300,000 on this date. The lease is noncancelable and requires 20 equal annual payments. beginning on the date of the lease. Although the lease includes a $50,000 guaranteed residual value at the end of the lease term, Chestnut Hill believes the residual value will only be $40,000. The equipment has an estimated economic life of 25 years with a zero residual value at that time. Plymouth determined its required lease payments using a discount rate of 10 percent. Plymouth also included executory costs in the annual lease payments for its annual property taxes on the building of $3,000 per year, Chestnut Hill has an incremental borrowing rate of 9.8% but knows Plymouth's implicit rate. Both firms use a calendar year. What is the required annual lease payment (inctuding oxecutory costs) to be paid by Chestnut Hell to Plymouth Finance (round to the nearest dollar)? a. 535,591 b. $39,046 c. $38,591 d. $36,046