On December 31, 2016, Tamarisk Corporation signed a 5-year, non-cancelable lease for a machine. The terms of the lease called for Tamarisk to make annual payments of $8,978 at the beginning of each year, starting December 31, 2016. The machine has an estimated useful life of 6 years and a $5,200 unguaranteed residual value. The machine reverts back to the lessor at the end of the lease term. Tamarisk uses the straight-line method of depreciation for all of its plant assets. Tamarisks incremental borrowing rate is 10%, and the lessors implicit rate is unknown.

1. Compute the present value of the lease payments. $ ____________