2 04:38:47 k Pad Hard Hat Company is in the process of purchasing several large pieces of equipment from Machine Corporation. Several financing alternatives have been offered by Machine: 1. Pay $1160,000 in cash immediately 2. Pay $461,000 immediately and the remainder in 10 annual installments of $94,000, with the first installment due in one year. 3. Make 10 annual installments of $156,000 with the first payment due immediately 4. Make one lump-sum payment of $1.730,000 five years from date of purchase. Required: Determine the best alternative for Hard Hat, assuming that Hard Hat can borrow funds at ain) 8% interest rate Note: Round your final answers to nearest whole doller amount. Use tables, Excel, or a financial calculator. (EX.53 EV.53 EXA of51 EVA of 31 EVAD of 51 and PVAD of SD Option 1 Option 2 Option 3 Option 4 The best alternative for Hard Hat PV
2 04:38:47 k Pad Hard Hat Company is in the process of purchasing several large pieces of equipment from Machine Corporation. Several financing alternatives have been offered by Machine: 1. Pay $1160,000 in cash immediately 2. Pay $461,000 immediately and the remainder in 10 annual installments of $94,000, with the first installment due in one year. 3. Make 10 annual installments of $156,000 with the first payment due immediately 4. Make one lump-sum payment of $1.730,000 five years from date of purchase. Required: Determine the best alternative for Hard Hat, assuming that Hard Hat can borrow funds at ain) 8% interest rate Note: Round your final answers to nearest whole doller amount. Use tables, Excel, or a financial calculator. (EX.53 EV.53 EXA of51 EVA of 31 EVAD of 51 and PVAD of SD Option 1 Option 2 Option 3 Option 4 The best alternative for Hard Hat PV
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Hard Hat Company is in the process of purchasing several large pieces of equipment from Machine Corporation. Several financing
alternatives have been offered by Machine:
1. Pay $1160,000 in cash immediately.
2. Pay $461,000 immediately and the remainder in 10 annual installments of $94,000, with the first installment due in one year.
3. Make 10 annual installments of $156,000 with the first payment due immediately
4. Make one lump-sum payment of $1,730,000 five years from date of purchase.
Required:
Determine the best alternative for Hard Hat, assuming that Hard Hat can borrow funds at a(n) 8% interest rate.
Note: Round your final answers to nearest whole dollar amount. Use tables, Excel, or a financial calculator. (EV of S1 PV of $1. EVA
of51. PVA of$1. EVAD of $1 and PVAD of $3
Option 1
Option 2
Option 3
Option 4
The best alternative for Hard Hat
PV
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