Cullen Corporation is buying new equipment. It can pay $39,500 today (option 1), or $10,000 today and

Question:

Cullen is buying new equipment. It can pay $39,500 today (option 1), or $10,000 today and 5 yearly payments of $8,000 each, starting in one year (option 2).

Instructions
Which option should Cullen select? (Assume a of 10%.)

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