You work for a nuclear research laboratory that is contemplating leasing a diagnostic scanner (leasing is a very common practice with expensive, high-tech equipment). The scanner costs $5,400,000, and it would be depreciated straight-line to zero over four years. Because of radiation contamination, it will actually be completely valueless in four years. You can lease it for $1,610,000 per year for four years.Assume that the tax rate is 35 percent. You can borrow at 8 percent before taxes.

Assume that your company does not anticipate paying taxes for the next several years. What are the cash flows from leasing in this case?