Refer to above question. What would the minimum annual lease payments be if the machine can be salvaged for $26400 at the end of the lease and the after-tax required rate of return is 5.85%? Solve using excel.

A) $7,300 B) $8,100 C) $8,800 D) $8,000 E) $7,700

If a firm can buy a machine for $80000, takes an investment tax credit of 15%, and lease out the machine for 9 years with lease payments at the beginning of the year,how much should the minimum annual lease payments be? Assume a 5-year straight-line depreciation, zero salvage and a tax rate of 35%. Assume further that it can borrow at a before tax rate of 7%