Aregional jet manufacturer delivers 20 regional jets to an airline under long-term leases. the leaseterms are for 15 years with annual payments of $5 million per plane; the first payment is due on delivery. the company classifies the leases as finance leases and prepares its financial statements according to usgaap. the company usually sells these jets for $45 million each, with production cost averaging $40million per jet. in the year in which the leases are signed, if an interest rate of 7% is used to determine thepresent value of the lease payments on the deal, the gross profit on this transaction will be closest to:

a.$175 million.
b.$100 million.
c.$111 million.