Oscar Company acquired a patent on a manufacturing process on January 1, 2015 for $5,100,000. It was expected to have a 12 year life and no residual value. Oscar uses straight-line amortization for patents. On December 31, 2016, the expected future cash flows from the patent are $387,500 per year for the next ten years. The present value of these cash flows, discounted at Oscars market interest rate, is $3,050,000. At what amount should the patent be carried on the December 31, 2016 balance sheet?

$3,050,000

$5,100,000

$4,250,000

$3,875,000