Bavarian Brew Lease Bavarian Brew Wants to Lease a New Bottling Machine. the Bottling

Bavarian Brew Lease
Bavarian Brew wants to lease a new bottling machine. The company obtains a 10 year lease requiring annual payments of $15,000 at the beginning of the year. The firm is expected to exercise its option to purchase the machine at the termination of the lease for $10,000 at the end of year 10. The company is in the 35% tax bracket.
-Bavarian Brew has also the option to purchase the machine.If the present value of the cash flows associated with the purchase is $78,000,what is the net present value of the lease option? Assume that the company's cost of debt is 7%.

A) $8,870
B) -$8,870
C) $7,950
D) -$7,950