A lease has a term of 7 years with annual payments of $7,600. The asset would cost $56,000 to buy and would be depreciated straight-line to a zero salvage value over 7 years. The actual salvage value is zero. If the firm has a tax rate of 34 percent, what is the incremental cash flow in Year 7 of leasing rather than purchasing?
- -$9,560
- $8,040
- -$7,736
- -$7,670
- $7,820