what is the maximum amount that the company should pay for the machine today such that the chouices should be equivalent? a. 817,253 b. $853, 946 c. $840,551 d. $843,848 e. None of the above

Financial Accounting Intro Concepts Meth/Uses
14th Edition
ISBN:9781285595047
Author:Weil
Publisher:Weil
ChapterA: Appendix - Time Value Of Cash Flows: Compound Interest Concepts And Applications
Section: Chapter Questions
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A company is buying a machine. They can pay a $45,000 downpayment now, and pay %15,000 every month for the life of the machine (7 years), or they can pay teh full marks value of the machine now. If the salvage value is expected to be $250,000 and can borrow money at an interest rate of 9%, compounded monthly, what is the maximum amount that the company should pay for the machine today such that the chouices should be equivalent?

a. 817,253

b. $853, 946

c. $840,551

d. $843,848

e. None of the above

: List answer ______

 

Please use excel and show formulas.

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