Rogers Company is considering purchasing equipment. The equipment will produce the following cash flows:
Year 1 $20,000
Year 2 $30,000
Dexter requires a minimum rate of return of 10%. What is the maximum price Rogers should pay for this equipment?
A) $42,975.30.
B) $21,487.65.
C) $50,000.00.
D) $25,000.00.