Daily Enterprises is contemplating the acquisition of some new equipment. The purchase price is $32,000. The equipment has a 4-year life. The company expects to sell the equipment at the end of year 4 for $6,000. The firm uses MACRS depreciation which allows for 33.33 percent, 44.44 percent, 14.82 percent, and 7.41 percent depreciation over years 1 to 4, respectively. The equipment can be leased for $8,000 a year. The firm can borrow money at 10 percent and has a 33 percent tax rate. What is the incremental annual cash flow for year 4 if the company decides to lease the equipment rather than purchase it?

a. $-5,480

b. $-9,706

c. $-4,686

d. $-13,038

e. $-10,162