Your bank is considering a $3 million leasing program with equal rental payments due at the end of each of the next seven years. Rental payments will be $532,000 and the residual value is 18% of the initial asset cost. Depreciation will be based on the seven-year class of the MACRS with a shift from 150% declining balance to straight line in the fourth year. The after-tax weighted cost of capital will be 6.3% and the marginal income tax rate will be 32%. What will the net present value of the leasing program be? Should you implement the leasing program?

$(5,413). No, don't implement.

$1. Yes, implement.

$8,007. Yes, implement.

$(10,046). No, don't implement.