Question: A small manufacturing company needs to purchase a machine that will have a first cost of $70,000. The company wants to buy an option that

A small manufacturing company needs to purchase a machine that will have a first cost of $70,000. The company wants to buy an option that will allow it to purchase the machine for the same price of $70,000 for up to 1 year from now. If the company's MARR is 10% per year, the maximum amount the company should pay for the option is closest to:

(a) $5850

(b) $6365

(d) $7295

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