Big Sky Mining Company must install $$1\mathrm{.}5$ million of new machinery in its Nevada mine. It can obtain a bank loan for $100\%$ of the purchase price, or it can lease the machinery. Assume that the following facts apply:

The machinery falls into the MACRS $3-$year class.

Under either the lease or the purchase, Big Sky must pay for insurance, property taxes, and maintenance.

The firm's tax rate is $35\%.$

The loan would have an interest rate of $15\%.$ It would be nonamortizing, with only interest paid at the end of each year for four years and the principal repaid at Year $4.$

The lease terms call for $$400,000$ payments at the end of each of the next $4$ years.

Big Sky Mining has no use for the machine beyond the expiration of the lease, and the machine has an estimated residual value of $$300,000$ at the end of the $4$th year.

MACRS

Year Allowance Factor

$10\mathrm{.}3333$

$20\mathrm{.}4445$

$30\mathrm{.}1481$

$40\mathrm{.}0741$

What is the NAL of the lease? Do not round intermediate calculations. Round your answer to the nearest dollar.