John and Sally Claussen are contemplating the purchase of a hardware store from John Duggan. The Claussens anticipate that the store will generate cash flows of $82,000 per year for 20 years. At the end of 20 years, they intend to sell the store for an estimated $520,000. The Claussens will finance the investment with a variable rate mortgage. Interest rates will increase twice during the 20-year life of the mortgage. Accordingly, the Claussens desired rate of return on this investment varies as follows: Years 15 7 % Years 610 9 % Years 1120 11 % Required: What is the maximum amount the Claussens should pay John Duggan for the hardware store? (Assume that all cash flows occur at the end of the year.) (Use PV of $1 "Table 2" and PVA of $1 "Table 4") (Round "PV Factors" to 5 decimal places, intermediate and final answer to the nearest dollar amount.)

John and Sally Claussen are contemplating the purchase of a hardware store from John Duggan. The Claussens anticipate that the store will generate cash flows of $82,000 per year for 20 years. At the end of 20 years, they intend to sell the store for an estimated $520,000. The Claussens will finance the investment with a variable rate mortgage. Interest rates will increase twice during the 20-year life of the mortgage. Accordingly, the Claussens½ desired rate of return on this investment varies as follows: Years 1½5 7% Years 6½10 9% Years 11½20 11% Required: What is the maximum amount the Claussens should pay John Duggan for the hardware store? (Assume that all cash flows occur at the end of the year.) (Use PV of $1 "Table 2" and PVA of $1 "Table 4") (Round "PV Factors" to 5 decimal places, intermediate and final answer to the nearest dollar amount.) John and Sally Claussen are contemplating the purchase of a hardware store from John Duggan. The Claussens anticipate that the store will generate cash flows of $82,000 per year for 20 years. At the end of 20 years, they intend to sell the store for an estimated $520,000. The Claussens will finance the investment with a variable rate mortgage. Interest rates will increase twice during the 20-year life of the mortgage. Accordingly, the Claussens½ desired rate of return on this investment varies as follows: Years 1½5 7% Years 6½10 9% Years 11½20 11% Required: What is the maximum amount the Claussens should pay John Duggan for the hardware store? (Assume that all cash flows occur at the end of the year.) (Use PV of $1 "Table 2" and PVA of $1 "Table 4") (Round "PV Factors" to 5 decimal places, intermediate and final answer to the nearest dollar amount.)