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

borrowing funds at a pre$-$tax rate of $8\%$ 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. Doing so would

bring the company pre$-$tax savings in the amount of $$2\mathrm{.}8$ million each year.

The required fleet of drones costs $$7\mathrm{.}9$ million. If the company chooses to buy them, the

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

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

have no salvage value at the end.

Instead of buying the fleet of the drones, Jeff & Bezos is also contemplating leasing the

drones for a lease term that matches the drones' economic life. It would lease them from

a different company, Nets & Flicks, that currently owns the required number of the

drones. The estimated annual pre$-$tax cost of leasing would be $$1,750,000.$ Nets & Flicks

requires that the lease payments are made by Jeff & Bezos at the beginning of

each year. One additional requirement is that Jeff & Bezos pays a $$810,000$ security

deposit when the lease agreement is being signed, and at the end of the lease term

Nets & Flicks promises to give the deposit back to Jeff & Bezos.

When the security deposit is also taken into account, Jeff & Bezos' net advantage to

leasing, or NAL, equals $($Do not round intermediate calculations and enter your

answer in dollars, not millions of dollars, rounded to $2$ decimal places, e$.$g$.,$

$1,234,567\mathrm{.}89.)$

NAL