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Harding Company is in the process of purchasing several large pieces of equipment from Danning Machine Corporation. Several financing alternatives have been offered by Danning:

Harding Company is in the process of purchasing several large pieces of equipment from Danning Machine Corporation. Several financing alternatives have been offered by Danning: 1. Pay $1,010,000 in cash immediately. 2. Pay $431,000 immediately and the remainder in 10 annual installments of $91,000, with the first installment due in one year. 3. Make 10 annual installments of $153,000 with the first payment due immediately. 4. Make one lump-sum payment of $1,720,000 five years from date of purchase. Required: a. Assuming that Harding can borrow funds at an 11% interest rate, determine the present value. (Use PV of $1, PVA of $1, and PVAD of $1) (Round "PV Factors" to 5 decimal places and final answers to the nearest dollar amount.) Alternative PV 1 $ 2 $ 3 $ 4 $ b. Which is the best alternative for Harding? Alternative 1 Alternative 2 Alternative 3 Alternative 4 Expert Answer

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