Problem $5-5($Algo$)$ Investment decision; varying rates $[$LO$5-3,5-8]$

The Claussens are considering the purchase of a hardware store. The Claussens anticipate that the store will generate cash

flows of $$84,000$ per year for $20$ years. At the end of $20$ years, they intend to sell the store for an estimated $$540,000.$ The

Claussens will finance the investment with a variable rate mortgage. Interest rates will increase twice during the $20-$year life

of the mortgage. Accordingly, the Claussens' desired rate of return on this investment varies as follows:

Required:

What is the maximum amount the Claussens should pay for the hardware store? $($Assume that all cash flows occur at the

end of the year.$)$

Note: Do not round intermediate calculations. Round your final answers to nearest whole dollar amount. Use tables,

Excel, or a financial calculator. $($FV of $$1,$ PV of $$1,$ FVA of $$1,$ PVA of $$1,$ FVAD of $$1$ and PVAD of $$1)$