The K-Nine Dog Food Company Is Considering the Purchase of Additional

Multiple Choice

The K-Nine dog food company is considering the purchase of additional canning equipment.They expect that adding the equipment will yield $200,000 at the end of the first year and $250,000 at the end of the second year and then nothing after that.At which of the following prices and interest rates would K-Nine buy the equipment?

A) $415,000 if the interest rate is 5%
B) $419,000 if the interest rate is 4%
C) K-Nine would buy the equipment in both cases.
D) K-Nine would not buy the equipment in either case.