Problem
Rental equipment is for sale for $110,000. A prospective buyer estimates he would keep the equipment for 12 years and spend $6000 a year on maintaining it. Estimated annual net receipts from equipment rentals would be $14,400. It is estimated the rental equipment could be sold for $80,000 at the end of 12 years. If the buyer wants a 7% rate of return on his investment, what is the maximum price he should pay for the equipment?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.