Freyensee just acquired office furniture that had a list price of $ 400,000. The furniture store said that it would finance the entire price at 0 percent interest by letting the company make eight quarterly payments of $ 50,000 starting three months from the date of purchase.
A. If Freyensee Company can borrow money at 8 percent, what is the cost of the office furniture?
B. What is the cost of the office furniture if Freyensee Company usually borrows money at 6 percent?
C. What is the cost of the office furniture if Freyensee Company agrees to make four semiannual payments of $ 100,000 each if it usually borrows money at 8 percent?