Sandhill Company leases a machine from Vollmer Corp. under an agreement which meets the criteria to be a finance lease for Sandhill. The six-year lease requires payment of $166000 at the beginning of each year, including $24600 per year for maintenance, insurance, and taxes. The incremental borrowing rate for the lessee is 9%; the lessors implicit rate is 7% and is known by the lessee. The present value of an annuity due of 1 for six years at 9% is 4.88965. The present value of an annuity due of 1 for six years at 7% is 5.10020. Sandhill should record the leased asset at

A) $721168.

B) $846633.

C) $811682.

D) $691397