Your Firm Is Considering Leasing a New Robotic Milling Control

Your firm is considering leasing a new robotic milling control system.The lease lasts for 5 years.The lease calls for 6 payments of £300,000 per year with the first payment occurring at lease inception.The black box would cost £1,050,000 to buy and would be straight-line depreciated to a zero salvage.The actual salvage value is zero.The firm can borrow at 8%,and the corporate tax rate is 34%. What is the maximum lease payment that you would be willing to make?

A) £170,655
B) £175,000
C) £187,842
D) £210,307
E) None of the above.