Smart Co is considering buying a machine, which will reduce the amount of labour employed, saving 120,000 per year in current terms. The first saving will be one year from now. The company expects: - inflation in wage rates to be 9% per annum; - inflation in general to be 5% per annum; - its nominal cost of capital to be 21% Required: If the labour savings are expected to continue to perpetuity, what is the maximum worth spending on the machine (rounding within 1,000)? a) b) c) d) 571,400 787,500 1,000,000 1,090,000