Frank Incis Trying to Decide Whether to Lease or Purchase a a Piece

Frank Inc.is trying to decide whether to lease or purchase a piece of equipment needed for the next ten years.The equipment would cost $45,000 to purchase,and maintenance costs would be $5,000 per year.After ten years,Frank estimates it could sell the equipment for $20,000.If Frank leased the equipment,it would pay a set annual fee that would include all maintenance costs.Frank has determined after a net present value analysis that at its hurdle rate of 10%,it would be better off by $5,700 if it buys the equipment.What would the approximate annual cost be if Frank were to lease the equipment? (Future Value of $1,Present Value of $1,Future Value Annuity of $1,Present Value Annuity of $1. ) (Use appropriate factor from the PV tables.Do not round intermediate calculations.Round your final answer to the nearest hundred. )

A) $9,000
B) $7,000
C) $12,000
D) $13,250