Question: (Do not round intermediate calculations. Use 1000 separator and round your answer to 2 decimal places, e.g., 1,032.16.) When Billy graduated from University of Wisconsin-Milwaukee,

(Do not round intermediate calculations. Use 1000 separator and round your answer to 2 decimal places, e.g., 1,032.16.)

When Billy graduated from University of Wisconsin-Milwaukee, he had two job offers which were both 5-year contracts. Contract 1 is from Minnesota, $11,000 per year being paid at the end of each year. Contract 2 is from North Carolina, starting with $6,200 for first year and increasing by $2,500 each year, also paid at the end of each year. The interest rate on the market that Billy could earn at that time was 6% per year

What is the present value of Contract 1? $

What is the present value of Contract 2? $

According to the theory of time value of money, which offer should Billy take? (Fill in the cell with the number that stands for the alternative you pick up from the following list: 1. Contract 1; 2. Contract 2)

What is the present value of Contract 1 if it will pay the salary at the beginning of each year? $

Then, with Contract 2 unchanged, which offer should Billy take? (Fill in the cell with the number that stands for the alternative you pick up from the following list: 1. Contract 1; 2. Contract 2)

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