Keipersol Investments has needs a new forklift. The machine can be purchased for $120,000 or it can acquired using a 5-year financing lease. The annual lease payments are $20,000, payable in advance, with a final residual payment of $40,000 at the end of the contract. If purchased, the machine can be depreciated straight-line over 5 years. Moreover, its salvage value at the end of year 5 will be $60,000. Kiepersol pays tax at 30% and lease payments are tax-deductible at the time of payment.

The following table presents the cash flows from leasing the machine and the cash flows from purchasing it, as well as the incremental cash flows (leasing minus buying):

Year 0Year 1Year 2Year 3Year 4Year 5LeasingLCF0LCF2LCF2LCF3LCF4LCF5BuyingBCF0BCF1BCF2BCF3BCF4BCF5IncrementICF0ICF1ICF2ICF3ICF4ICF5

What is the value of the cash flow ICF2?

Group of answer choices

-$14,000

None of the other answers is correct

-$16,400

-$22,400

-$12,400