What the maximum amount will be willing to spend

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Problem 1: Shirt Co. wants to purchase a new cutting machine for its sewing plant. The investment is expected to generate annual net cash inflows of $30,000, have a useful life of 6 years, and an estimated salvage value of $10,000. If Shirt Co. has a required rate of return of 12%, the maximum amount they will be willing to spend for this machine is

Option 1: $198,720

Option 2: $153,080

Option 3: $149,040

Option 4: $128,400

Reference no: EM132761739

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