E$11-6($Algo$)$ Comparing Options Using Present Value Concepts $[$LO $11-$S$1]$

Ater hearing a knock at your front dooc you are surprised to see the Prize Patrol from a large, well$-$known magazine subscription company, It has arrived with the good news that you are the blig winner, having won $$34$ mitilon, You hove three options:

a$.$ Recelve $$17$ million per year for the next $20$ years.

b$.$ Have $$11\mathrm{.}5$ million today.

c$.$ Have $$3\mathrm{.}25$ million today and recelve $$1,400,000$ for each of the next $20$ years.

Your financial adviser tells you that it is reasonable to expect to earn $14$ percent on investments.

Required:

Calculate the present value of each option. $($Euture Value of $$1.$Present Value of $$1.$ Euture Value Annuity of $$1.$ Present Value Annu ty oCS$1.)$

Determine which option you prefer.

Complete this question by entering your answers in the tabs below.

Required $1$

Calculate the present value of each option. $($Future Value of $$1,$ Present Value of $$1,Fi$ Present Value Annuity of $$1.)$

Note: Use appropriate factor$($s$)$ from the tables provided. Round your finat answer to the n answers in dollars, not in millions.

$\backslash$table$[[,$Present Value$],[$Option A$,],[$Option B$,],[$Option C$,]]$

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