Pizza Shoppes Is Considering Either Leasing or Buying a New

Pizza Shoppes is considering either leasing or buying a new $24,000 oven. The lease payments would be $8,700 a year for three years. The oven would be depreciated on a straight-line basis over a three-year life and then be resold for $5,500. The firm borrows at 7 percent and has a tax rate of 21 percent. What is the net advantage to leasing?

A) -$2,809
B) -$1,833
C) −$2,084
D) −$2,760
E) −$1,899