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Determine the present value

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Question - 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 $1,090,000 in cash immediately.

2. Pay $491,000 immediately and the remainder in 10 annual installments of $76,000, with the first installment due in one year.

3. Make 10 annual installments of $145,000 with the first payment due immediately.

4. Make one lump-sum payment of $1,760,000 five years from date of purchase.

Required: Determine the present value, assuming that Harding can borrow funds at an 9% interest rate for each one.

Reference no: EM131727382

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