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:

Pay $ in cash immediately.

Pay $ immediately and the remainder in annual installments of $ with the first installment due in one year.

Make annual installments of $ with the first payment due immediately.

Make one lumpsum payment of $ five years from date of purchase.

Required:

Determine the best alternative for Hard Hat, assuming that Hard Hat can borrow funds at an interest rate