Rosie's Grill Is Trying to Decide Whether to Lease or Buy

Rosie's Grill is trying to decide whether to lease or buy some new equipment. The equipment costs $49,000, has a 3-year life, and is worthless after the 3 years. The after-tax discount rate is 5.5 percent. The equipment belongs in a 25 percent CCA class and the after-tax annual lease payment is $11,375. The firm faces a tax rate of 35 percent. What is the net advantage to leasing?

A) $2,456
B) $2,887
C) $3,009
D) $3,116
E) $4,807