Question - Beach Corporation is looking to purchase a building costing $800,000 by paying $100,000 cash on the purchase date, and agreeing to make 5 yearly payments for the remainder owed; the first payment is due 1 year after the purchase date. Beach's incremental borrowing rate is 7%.
How much will each of the payments be (expect slight rounding)?
A. $ 120,000
B. $ 75,137
C. $ 170,723
D. $ 225,411
E. $ 195,113