Monster Magnet Manufacturing is considering leasing some equipment. The annual lease payment would be $475,000 per year for 8 years. The appropriate interest rate is 10 percent and the company is in the 40 percent tax bracket.

What reduction in debt capacity would occur if the company signs the lease? (Enter your answer in dollars, not millions of dollars, e.g., 1,234,567. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Reduction in debt capacity

$