Farrakhan Fruits leased farm equipment from Hall Machinery on January 1, 2013. The present value of the lease payments discounted at 10% was $40 million. Ten annual lease payments of $6 million are due at the beginning of each year beginning January 1, 2013. Hall had constructed the equipment recently for $33 million and its retail fair value was $50 million. Its estimated useful life was 15 years. What amount of profit did Hall record at the commencement of the lease?
A) $7,000,000.
B) $10,000,000.
C) $13,600,000.
D) $17,000,000.
