Question $3$

You are the CFO for an airline and are deciding whether you should lease

some new airplanes. Assume you may buy them at $$100MM$ or to lease over

$10$ years at $$12\mathrm{.}5MM$ aftertax $($payments in arrears$).$ You believe the residual

value will be $$10MM$ after $10$ years and have an after$-$tax interest rate of

$6\%.$ What is your Net Advantage of Leasing $($NAL$)?$

Make sure you do not add any dollar signs or commas to your answer. Just

put in the whole number of dollars $($no need for cents here$).$