Problem $5-3($Algo$)$ Analysis of alternatives $[$LO$5-3,5-8]$

Hard Hat Company is in the process of purchasing several large pieces of equipment from Machine Corporation. Several financing alternatives have been offered by Machine:

Pay $$1,120,000$ in cash immediately.

Pay $$400,000$ immediately and the remainder in $12$ annual installments of $$86,000,$ with the first installment due in one year.

Make $12$ annual installments of $$130,000$ with the first payment due immediately.

Make one lump$-$sum payment of $$1,700,000$ six years from date of purchase.

Required:

Determine the best alternative for Hard Hat, assuming that Hard Hat can borrow funds at a$($n$)7\%$ interest rate. Note: Round your final answers to nearest whole dollar amount. Use tables, Excel, or a financial calculator. $($FV of