MLC, Inc. plans to either lease or buy equipment. The equipment has a 3-year life with no salvage expected. The company will depreciate on a straight-line basis over 3 years. The company can borrow the $6 million purchase price at 10% to buy the equipment or make 3 equal end-of-year lease payments of $2.5 million each to lease it. The company's tax rate is 30%. What is the cost of purchasing the equipment?

1. $4,200,000

2. $4,031,763

3. $4,425,410

4. $4,507,889

5. None of the above