Question
Lights, Camera, and More sells filmmaking equipment. The company offers three purchase options: (1) pay full cash today, (2) pay one-half down and the remaining
Lights, Camera, and More sells filmmaking equipment. The company offers three purchase options: (1) pay full cash today, (2) pay one-half down and the remaining one-half plus 10% in one year, or (3) pay nothing down and the full amount plus 15% in one year. George is considering buying equipment from Lights, Camera, and More for $145,000 and therefore has the following payment options: |
Payment Today | Payment in One Year | Total Payment | |
Option 1 | $145,000 | $ 0 | $145,000 |
Option 2 | 72,500 | 79,750 | 152,250 |
Option 3 | 0 | 166,750 | 166,750 |
Assuming an annual discount rate of 12%, calculate the present value and the total cost. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided. Round your answers to 2 decimal places.) | |
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