Q 21A.35:

A five-year lease requires the lessee to supply the lessor with five equal annual payments of $25,000. The lessee estimates that each payment includes $1,500 of executory costs. When calculating the present value of the lease payments, the lessee should use what rental payment amount?

• A :

  $26,500

• B :

  $25,000

• C :

  $23,500

• D :

  The amount cannot be determined since only an estimated amount is provided.