Smith Financing leases cars to car rental companies. Smith has just signed a

5year

lease agreement that requires annual

yearend

lease payments of $470,000. The present value of $1 for 5 periods at 6% is 0.747. The present value of an ordinary annuity of $1 for 5 periods at 6% is 4.212. What is the present value of the lease when the lease commences using a 6% interest rate?

A.

$$2,173,750

B.

$2,350,000

C.

$1,588,600

D.

$1,979,640