Please use the following information for Questions 18, 19, and 20. To finance some manufacturing tools it needs for the next 3 years, Waldrop Corporation is considering a leasing arrangement. The tools will be obsolete and worthless after 3 years. The firm will depreciate the cost of the tools on a straight-line basis over their 3-year life. It can borrow $4,800,000, the purchase price, at 10% and buy the tools, or it can make 3 equal end-of- year lease payments of $2,100,000 each and lease them. The loan obtained from the bank is a 3- year simple interest loan, with interest paid at the end of the year. The firm's tax rate is 40%. Annual end-of-year maintenance costs associated with ownership are estimated at $240,000, but this cost would be borne by the lessor if it leases. The lease is a guideline lease. What is the cost of leasing? O-$2,575,868 -$3,368,000 O-$3,474,000 -$4,243,827 O-$4,800,000