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

Multiple Choice

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

A) $274,380
B) $165,290
C) $320,000
D) $160,000