Medarex Is Considering the Lease of an Electronic Welder Costing

Medarex is considering the lease of an electronic welder costing $210,000 from Key Leasing.The period of the lease will be 6 years.The welder will be depreciated under MACRS rules for a 5-year class asset.Medarex's marginal tax rate is 40%.Annual beginning of the year lease payments will be $50,000.Estimated salvage value is zero.If Medarex's after tax cost of borrowing is 15%, compute the net advantage to leasing.(Problem requires MACRS tables.)

A) $8,527
B) -$17,592
C) -$67,174
D) $21,427