Cayman Productions Is Considering Either Leasing or Buying Some New

Cayman Productions is considering either leasing or buying some new underwater photographic equipment.The lessor will charge $26,900 a year for a 2-year lease.The purchase price is $48,600.The equipment has a 2-year life after which time it will be worthless.Cayman uses straight-line depreciation,borrows money at 8 percent,and has sufficient tax loss carryovers to offset any taxes which otherwise might be owed for the next 4 years.What is the net advantage to leasing?

A) -$1,315
B) -$1,298
C) $630
D) $1,343
E) $1,457