Sheridan Cosmetics, Inc. has entered into a leasing agreement to rent equipment from Sheffield Leasing Services. There is no transfer of title, there is not a bargain purchase option, and the economic life test is not met. Based on the following information, what would be used in the 90% test for the present value of the lease payments for the lessee?

Annual payments (1^st day of the period) $51700

Lease termination 5 years

Guaranteed Residual Value $12600

Incremental Borrowing Rate (lessor implicit rate is not known) 8%

	PV Annuity Due	PV ordinary annuity	PV Single Sum
6%, 5 periods	4.46511	4.21236	0.74726
8%, 5 periods	4.31213	3.99271	0.68058
10%, 5 periods	4.16986	3.79079	0.62092

$231512

$271100

$258500

$222937