Several financing alternatives have been offered by danning

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Reference no: EM13589987

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 $1,130,000 in cash immediately.

2.Pay $402,000 immediately and the remainder in 12 annual installments of $90,000, with the first installment due in one year.
3. Make 12 annual installments of $132,000 with the first payment due immediately.
4. Make one lump-sum payment of $1,720,000 six years from date of purchase.

Required:

Determine the present value, assuming that Harding can borrow funds at an 7% interest rate.

Reference no: EM13589987

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