Business, 01.02.2021 21:40, bm42400

Harding Company is in the process of purchasing several large pieces of equipment from Danning Machine Corporation. Several financing alternatives have been offered by Danning: 1. Pay $1,000,000 in cash immediately.
2. Pay $450,000 immediately and the remainder in 10 annual installments of $83,000, with the first installment due in one year.
3. Make 10 annual installments of $145,000 with the first payment due immediately.
4. Make one lump-sum payment of $1,620,000 five years from date of purchase.
Assuming that Harding can borrow funds at an 10% interest rate, determine the present value. (Use pv of $1. pvA of $1. and pvad ofsil (Round "PV Factors" to 5 decimal places and final answers to the nearest dollar amount.)
Which is the best alternative for Harding?
A. Alternative 1
B. Alternative 2
C. Alternative 3
D. Alternative 4

Answers: 3

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Harding Company is in the process of purchasing several large pieces of equipment from Danning Machi...