of 9%, compounded monthly, what is the maximum amount that the company should pay for the machine today such that the chouices should be equivalent?

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
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Please answer fast please arjent help please

A company is buying a machine. They can
pay a $45,000 downpayment now, and pay
%15,000 every month for the life of the
machine (7 years), or they can pay teh full
marks value of the machine now. If the
salvage value is expected to be $250,000
and can borrow money at an interest rate
of 9%, compounded monthly, what is the
maximum amount that the company should
pay for the machine today such that the
chouices should be equivalent?
а. 817,253
b. $853, 946
c. $840,551
d. $843,848
e. None of the above: List answer
Please use excel and show formulas.
Transcribed Image Text:A company is buying a machine. They can pay a $45,000 downpayment now, and pay %15,000 every month for the life of the machine (7 years), or they can pay teh full marks value of the machine now. If the salvage value is expected to be $250,000 and can borrow money at an interest rate of 9%, compounded monthly, what is the maximum amount that the company should pay for the machine today such that the chouices should be equivalent? а. 817,253 b. $853, 946 c. $840,551 d. $843,848 e. None of the above: List answer Please use excel and show formulas.
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