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Harding Company is in the process of purchasing several large pieces of equipment from Panning Machine Corporation. Several financing alternatives have been offered by Panning:
Harding Company is in the process of purchasing several large pieces of equipment from Panning Machine Corporation. Several financing alternatives have been offered by Panning: (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.) Pay $1.080.000 in cash immediately. Pay $481,000 immediately and the remainder in 12 annual installments of $75,000, with the first installment due in one year. Make 12 annual installments of $132,000 with the first payment due immediately. Make one lump-sum payment of $1,750,000 six years from date of purchase. Determine the present value, assuming that Harding can borrow funds at an 8% interest rate. Determine the best alternative for Harding. Option 1 Option 2 Option 3 Option 4
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