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Pendley Company is considering purchasing equipment. The equipment will produce the following cash flows: Year 1, $38,000; Year 2, $40,000; and Year 3, $50,000. Pendley

Pendley Company is considering purchasing equipment. The equipment will produce the following cash flows: Year 1, $38,000; Year 2, $40,000; and Year 3, $50,000. Pendley requires a minimum rate of return of 10%.

What is the maximum price Pendley should pay for this equipment?

Future Value of 1: 1.33100

Future Value of an Annuity of 1: 3.31000

Present Value of 1: .75132

Present Value of an Annuity of 1:2.48685

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