To Finance Some Manufacturing Tools It Needs for the Next

To finance some manufacturing tools it needs for the next 3 years, Waldrop Corporation is considering a leasing arrangement.The tools will be obsolete and worthless after 3 years.The firm will depreciate the cost of the tools on a straight-line basis over their 3-year life.It can borrow $4,800,000, the purchase price, at 10% and buy the tools, or it can make 3 equal end-of-year lease payments of $2,100,000 each and lease them.The loan obtained from the bank is a 3-year simple interest loan, with interest paid at the end of the year.The firm's tax rate is 25%.Annual maintenance costs associated with ownership are estimated at $240,000, but this cost would be borne by the lessor if it leases.What is the net advantage to leasing (NAL) , in thousands? (Suggestion: Delete 3 zeros from dollars and work in thousands.)

A) $119
B) $132
C) $139
D) $146
E) $153