Harding Company Is in the process of purchasing several large pieces of equipment from Danning Machine Corporation. Several financing alternatives have been offered by Danning: (EV of S1, PV of SI. EVA of SI, PVA of SI, FVAD.of S1 and PYAD of.Si) (Use
appropriate factors) from the tables provided.)
1. Pay $1,080,000 In cash immediately.
2. Pay $481,000 immediately and the remainder in 12 annual installments of $75,000, with the first installment due in one year.
3. Make 12 annual installments of $132,000 with the first payment due Immediately.
4. Make one lump-sum payment of $1,750,000 six years from date of purchase.
Required: Determine the best alternative for Harding. assuming that Harding can borrow funds at a 8% interest rate.