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Hello, Can you please take a look at this problem and give an explanation for the correct answer? Thank you. Harding Company is in the

Hello,

Can you please take a look at this problem and give an explanation for the correct answer? Thank you.

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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: (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.) 1. Pay $1,180,000 in cash immediately. 2. Pay $481,000 immediately and the remainder in 10 annual installments of $98,000, with the first installment due in one year. 3. Make 10 annual installments of $162,000 with the first payment due immediately. 4. Make one lump-sum payment of $1,770,000 five years from date of purchase. Required: Determine the best alternative for Harding, assuming that Harding can borrow funds at a 8% interest rate. (Round your final answers to nearest whole dollar amount.) Answer is complete but not entirely correct. PV Option 1 Option 2 Option 3 Option 4 The best alternative for Harding $ 1,180,000 $ 481,000 $ $ 1,087,425 $ 1,203,600 Option 3

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