(Answered) A lease has a term of 7 years with annual payments of 7600

Statistics

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

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