Daily Enterprises is contemplating the acquisition of some new equipment. The purchase price is $35,000. The equipment has a 4-year life. The company expects to sell the equipment at the end of year 4 for $7,000. 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 $9,000 a year. The firm can borrow money at 9 percent and has a 34 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?

($6,760)

($14,318)

($11,442)

($10,986)

($5,966)

Please show in excel spreadsheet format as well Thank you