Panorama Corporation Has Made an Offer to Wideview Brothers to Lease

Panorama Corporation has made an offer to Wideview Brothers to lease or purchase an asset that has a useful life of 6 years. The asset sells for $122 000 and has a CCA rate of 20%. The asset's expected salvage value is $16 000 at the end of its useful life. Panorama is willing to guarantee a6-year bank loan at a 8% interest rate, which is the best rate available, to cover the purchase price. As an alternative to a bank-financed purchase, Panorama would consider a 6-year lease of Wideview's asset. The annual lease payment would be $ 25 666, with the first payment due uponsigning the lease agreement. Wideview's analysis concludes that it makes economic sense to acquire the machinery. What is the present value of Panorama's leasing cost in this case?

A) $107 528
B) $111 181
C) $109 834
D) $113 556