PNC produces industrial equipment and lease them to its customers. PNC requires 10% after-tax required return on its lease contracts. A specific piece of equipment is valued at $700,000 and is usually leased for 7 years. PNC depreciates the projector on a straight-line to $0 book value in year 7. PNC expects that the piece will have a salvage value of $75,000 at the end of the lease period. PNCs income tax rate is 21%.

Determine the annual before-tax lease payment for the projector.

165,725

132,812

147,517

111,476