Exercise $12$A$-2($Algo$)$ Basic Present Value Concepts $[$LO$12-7]$

Julie has just retired. Her company's retirement program has two options as to how retirement benefits can be received. Under the first option, Julie would receive a lump sum of $$159,000$ immediately as her full retirement benefit. Under the second option, she would receive $$22,000$ each year for $7$ years plus a lump$-$sum payment of $$67,000$ at the end of the $7-$year period.

Click here to view Exhibit $12$B$-1$ and Exhibit $12$B$-2,$ to determine the appropriate discount factor$($s$)$ using tables.

Required:

$1-$a$.$ Calculate the present value for the following assuming that the money can be invested at $11\%.$

$1-$b$.$ If she can invest money at $11\%,$ which option would you recommend that she accept?

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

Req $1A$

Req $1B$

Calculate the present value for the following assuming that the money can be invested at $11\%.($Round your final answer to the nearest whole dollar amount.$)$

$\backslash$table$[[,$Option $1,$Option $2],[$Present value,,$]]$