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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:

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:

1.Pay $1,210,000 in cash immediately.

2.Pay $471,000 immediately and the remainder in 10 annual installments of $95,000, with the first installment due in one year.

3.Make 10 annual installments of $157,000 with the first payment due immediately.

4.Make one lump-sum payment of $1,740,000 five 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

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