Problem $21-11$ Deposits in Leasing

The Wildcat Oil Company is trying to decide whether to lease or buy a new computerassisted drilling system for its oil exploration business. Management has decided that it must use the system to stay competitive; it will provide $$4$ million in annual pretax cost savings. The system costs $$9\mathrm{.}1$ million and will be depreciated straight$-$line to zero over its five$-$year life, after which it will be worthless. Wildcat's tax rate is $25$ percent and the firm can borrow at $8$ percent. Lambert Leasing Company has offered to lease the drilling equipment to Wildcat for payments of $$2,010,000$ per year. Lambert's policy is to require its lessees to make payments at the start of the year. Suppose Lambert requires Wildcat to pay a $$930,000$ security deposit at the inception of the lease. Calculate the NAL with the security deposit. $($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