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 $$3\mathrm{.}5$ million in annual pretax cost

savings. The system costs $$8\mathrm{.}5$ million and will be depreclated straight$-$line to zero over

five years. Wildcat's tax rate is $25$ percent and the firm can borrow at $6$ percent.

Lambert's 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 aftertax residual value of

$$800,000$ at the end of the lease. What is the maximum lease payment acceptable to

Wildcat? $($Do not round Intermedlate calculations and enter your answer In dollars, not

millions of dollars, rounded to $2$ decimal places, e$.$g$.,1,234,567\mathrm{.}89.)$