Jeff \& Bezos is contemplating leasing the drones for a lease term that matches the...
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Accounting
Jeff \& Bezos is contemplating leasing the drones for a lease term that matches the drones' economic life. It would lease them from a different company, Nets \& Flicks, that currently owns the required number of the drones. Doing that would have an estimated pre-tax annual cost of $2,160,000. Nets \& Flicks' requirement is that the lease payments are made by Jeff \& Bezos at the beginning of each year. Instead of leasing the fleet of the drones, Jeff \& Bezos is also contemplating buying them, which would cost the company $9.2 million. If the company chooses to buy them, the drones would be losing their economic value following the straight-line depreciation method during their five-year life. The fleet of drones, due to their heavy usage, would have no salvage value at the end. Jeff \& Bezos' net advantage to leasing, or NAL, equals (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to 2 decimal places, e.g., 1,234,567.89. If your answer is negative, don't forget to put the minus sign.) The maximum pre-tax lease payment at which Jeff \& Bezos would be willing to sign the lease agreement with Nets \& Flicks equals (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to 2 decimal places, e.g., 1,234,567.89. Your answer should be entered as a positive value.)

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