Question

Answer each of the following independent questions. Alex Meir recently won a lottery and has the option of receiving one of the following three prizes: 1598.000 cash immediately. 12 $40.000 cash Immediately and a sbe period annuity of $9.900 beginning one year from today, or asbe-period annuity of $19.800 beginning one year from today. By el $1. PV of $1. EVA of $1. PVA $1. EVAD. Si and VAD $ (Use appropriate factor(s) from the tables provided.) 1. Assuming an interest rate of 6%, determine the present value for the above options. Which option should Alex choose? 2. The Weimer Corporation wants to accumulate a sum of money to repay certain debts due on December 31, 2027. Weimer will make annual deposits of $200.000 into a special bank account at the end of each of 10 years beginning December 31, 2018. Assuming that the bank account pays 6% Interest compounded annually, what will be the fund balance after the last payment is made on December 31, 2027? Complete this question by entering your answers in the tabs below. Required 1 Required 2 45Soming an interest rate of 6%, determine the present value for the above options. Which option should Alex choose? (Round your final answers to nearest whole dollar amount.) PV Annuity Immediate Cash PV Option Annuity Payment Option 1 Option 2 Option 3 Which option should Alex choose? Required 2 >

Answer 1

Required 2

oboard Font Alignment X fic =FV(C5,10,-200000,0,0) C D E F G Table or calculator function Payment Period Interest rate Future Value $ 200,000 10 years 6% $2,636,159

Required 1

Interest rate	6%
	Annuity Payment	PV Annuity	Immediate Cash	PV Option
Option 1	0	0	$98,000	$98,000
Option 2	$9,900	$4,931.51	$40,000	$44,932
Option 3	$19,800	$9,862.03	0	$9,862

Option 1