The Wildcat 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 $2.6 million in annual pre-tax cost savings. The system costs $8.4 million and will be depreciated at a CCA rate of 20 percent over five years. Wildcats tax rate is 34 percent, and the firm can borrow at 9 percent. Lambert Leasing Company has offered to lease the drilling equipment to Wildcat for payments of $1,950,000 per year. Lamberts policy is to require its lessees to make payments at the start of the year. Suppose it is estimated that the equipment will have an after-tax salvage value of $700,000 at the end of the lease. What is the maximum lease payment acceptable to Wildcat now? (Do not round intermediate calculations. Round the final answer to 2 decimal places. Enter the answer in dollars. Omit $ sign in your response.)

Maximum pretax lease payment $