The Jackson Oil Company is trying to decide whether to lease or buy a new computer-assisted drilling system for its oil exploration business. Management has decided that it must use the system to stay competitive; it will provide $2.9 million in annual pretax cost savings. The system costs $9.7 million and will be depreciated straight-line to zero over its five-year life, after which it will be worthless. Jacksons tax rate is 34 percent, and the firm can borrow at 7 percent. Lambert Leasing Company has offered to lease the drilling equipment to Jackson for payments of $2,110,000 per year. Lamberts policy is to require its lessees to make payments at the start of the year. Suppose Lambert requires Jackson to pay a $650,000 security deposit at the inception of the lease. Calculate the NAL with the security deposit. (round your answer to 2 decimal places)

NAL $