The Auto Mart Is Trying to Decide Whether to Lease

The Auto Mart is trying to decide whether to lease or buy some new equipment. The equipment costs $74,000, has a 3-year life, and will be worthless after the 3 years. The after-tax discount rate is 5.5 percent. The annual CCA tax shield is $8,633 and the after-tax annual lease payment is $16,033. What is the net advantage to leasing?

A) -$3,509
B) -$211
C) $4,414
D) $7,453
E) $8,316