Dexter Company Is Considering Purchasing Equipment $$\begin{array} { l l } \text { Year 1 } & \$ 120,000 \\\text { Year 2 } & \$ 200,000\end{array}$$

Multiple Choice

Dexter Company is considering purchasing equipment.The equipment will produce the following cash flows: $$\begin{array} { l l } \text { Year 1 } & \$ 120,000 \\\text { Year 2 } & \$ 200,000\end{array}$$ Dexter requires a minimum rate of return of 10%.What is the maximum price Dexter should pay for this equipment?

A) $274,381
B) $165,290
C) $320,000
D) $160,000