Saturn, Inc

Saturn, Inc. is trying to decide whether to lease or buy some new equipment. The equipment costs $38,000, has a 3-year life and will be worthless after the 3 years. The equipment will be replaced. The cost of borrowed funds is 8 percent and the tax rate is 34 percent. The equipment can be leased for $14,500 a year. What is the amount of the after-tax lease payment?

A) $4,930
B) $5,333
C) $9,570
D) $12,667
E) $14,500