Jeff & Bezos is a fresh groceries delivery company. The company has access to

borrowing funds at a pre$-$tax rate of $7\%$ per year. Jeff & Bezos pays income taxes using

$23\%$ tax rate. The company would like to start using high$-$speed low$-$altitude drones to

deliver grocery purchases directly to residential customers' backyards. The required

fleet of drones costs $$5,200,000.$ If the company chooses to buy them, the

drones would be losing their economic value following the straight$-$line depreciation

method during a four year period. The fleet of drones, due to their heavy usage, would

have no salvage value in four years. Instead of buying the fleet of the drones, Jeff &

Bezos is also contemplating leasing them for an estimated pre$-$tax annual cost of

$$1,460,000$ for four years from a different company. What should Jeff & Bezos do$?$

Should the company buy or lease the drones?

Calculate the net advantage to leasing, a$.$k$.$a$.$ NAL, for Jeff & Bezos. $($Do not round

intermediate calculations and round your answer to $2$ decimal places, e$.$g$.,32\mathrm{.}16.$ If

your answer is negative, don't forget to put the minus sign.$)$

NAL

Lease

Buy