Question: Aria, a computer engineer has developed an app for video file compression. A software company wants to purchase this app and offers the engineer two

Aria, a computer engineer has developed an app for video file compression. A software company wants to purchase this app and offers the engineer two payment options.

Option A: Payment of $200,000 for the first year and decrease by $15,000 per year thereafter for totally 10 years (i.e., last payment at year 10 is $65,000)

Option B: A lump-sum payment now in the amount of $1,000,000.

If the market interest rate is 4% per year, find the Present Value of payment Option A and decide which option should be selected

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