-Gaynor Company Is Considering Purchasing Equipment

Multiple Choice

-Gaynor Company is considering purchasing equipment. The equipment will produce the following cash flows: Year 1, $25,000; Year 2, $45,000; Year 3, $60,000. Below is some of the time value of money information that Gaynor has compiled that might help them in their planning and compounded interest decisions. Gaynor requires a minimum rate of return of 11%. To the closest dollar, what is the maximum price Gaynor should pay for the equipment?

A) $117,117
B) $102,917
C) $165,253
D) $246,209