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:
1.Pay $1,030,000 in cash immediately.
2.Pay $470,000 immediately and the remainder in 10 annual installments of $85,000, with the first
installment due in one year.
3.Make 10 annual installments of $147,000 with the first payment due immediately.
4.Make one lump-sum payment of $1,640,000 five years from date of purchase.