Harding Company is in the process of purchasing several large pieces of equipment from Danning Machine...
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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: (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) 1. Pay $1,060,000 in cash immediately. 2. Pay $466,000 immediately and the remainder in 10 annual installments of $81,000, with the first installment due in one year. 3. Make 10 annual installments of $150,000 with the first payment due immediately. 4. Make one lump-sum payment of $1,790,000 five years from date of purchase. Required: Determine the best alternative for Harding, assuming that Harding can borrow funds at a 11% interest rate. (Round your final answers to nearest whole dollar amount.) PV Option 1 Option 2 Option 3 Option 4 The best alternative for Harding 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: (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) 1. Pay $1,060,000 in cash immediately. 2. Pay $466,000 immediately and the remainder in 10 annual installments of $81,000, with the first installment due in one year. 3. Make 10 annual installments of $150,000 with the first payment due immediately. 4. Make one lump-sum payment of $1,790,000 five years from date of purchase. Required: Determine the best alternative for Harding, assuming that Harding can borrow funds at a 11% interest rate. (Round your final answers to nearest whole dollar amount.) PV Option 1 Option 2 Option 3 Option 4 The best alternative for Harding
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Option 1 Present value1060000 Option 2 interest rates 11 period 1... View the full answer
Related Book For
Intermediate Accounting
ISBN: 978-0077400163
6th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson
Posted Date:
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