Peterson, Inc

Multiple Choice

Peterson, Inc. purchased a machine under a deferred payment contract on December 31, 2010. Under the terms of the contract, Peterson is required to make eight annual payments of $140,000 each beginning December 31, 2011. The appropriate interest rate is 8 percent. The purchase price of the machine is

A) $1,389,190.
B) $1,120,000.
C) $868,900.
D) $804,530.