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In: Accounting

On August 1, 2016, Jason purchased machinery from Morgan for expanding its production operation. Morgan has...

On August 1, 2016, Jason purchased machinery from Morgan for expanding its production operation. Morgan has given Jason three options for payment:

a. $300,000 in cash now

b. $150,000 down payment now and $50,000 per year for the next ten years beginning August 1, 2017

c. $100,000 now and $100,000 per year for five years beginning August 1, 2017

Required: Determine which of the above payment plans Jason should choose. The effective annual interest rate is expected to be 12% during this period.

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ekkarill92 answered 2 years ago
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