20. TSC co. has a machine which costs $281,128 and it would be depreciatedusing the straightline method by a leasing firm over a period of 3 years.Both the book value and the market value would be zero at the end of the3 years. Both the lessor and the lessee have a tax rate of 21 percent. Whatis the NPV of the lease relative to the purchase to the lessor if theapplicable pretax cost of borrowing is 7 percent and the lease paymentsare set at $102,000 annually for 3 years?
(A)-$1,0787
(B)-$9,660
(C)$427
(D)$885
(E) $41