Martin Industries maintains its accounting records using IFRS. The company purchases equipment with a price of $400,000. The manufacturer has offered a payment plan that would allow Martin to make 10 equal annual payments of $49,316, with the first payment due one year after the purchase.

Martin could borrow $400,000 from its bank to finance the purchase at an annual rate of 6%. Should Martin borrow from the bank or use the manufacturer's payment plan to pay for the equipment?

		Borrow from the bank.
		Use the manufacturer's payment plan.
		The rates for both the bank and manufacturer are the same, so Martin would be indifferent.
		There is not enough information to answer this question.