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Question3: Marks: 15/Time: 60 min PART (A) Marks (7) / Time 30 minutes Mr.X is going to retire soon. His employer gives him two options; a. An annual pension of Rs. 8,000 for as long as he lives, and b. A lump sum amount of Rs. 50,000 today If he expects to live for 20 years and his time preference rate is 10%, which option is better for X on the basis of Present value calculation or today? PART (B) Marks (8) / Time 30 minutes A paper company paid $400,000 at the start of a project to clear an area of land and plant some young pine trees. The trees will mature in 10 years, at that time what will be the value of forest? If these costs will be incurred for plantation and clear the land: 1) ii) They required $20,000 at the start of every year for medicine and spray for the land Salaries of the gardeners' $10,000 paid at the end of each year Required: What should be the value of the forest if interest rate is 15%? Question3: Marks: 15/Time: 60 min PART (A) Marks (7) / Time 30 minutes Mr.X is going to retire soon. His employer gives him two options; a. An annual pension of Rs. 8,000 for as long as he lives, and b. A lump sum amount of Rs. 50,000 today If he expects to live for 20 years and his time preference rate is 10%, which option is better for X on the basis of Present value calculation or today? PART (B) Marks (8) / Time 30 minutes A paper company paid $400,000 at the start of a project to clear an area of land and plant some young pine trees. The trees will mature in 10 years, at that time what will be the value of forest? If these costs will be incurred for plantation and clear the land: 1) ii) They required $20,000 at the start of every year for medicine and spray for the land Salaries of the gardeners' $10,000 paid at the end of each year Required: What should be the value of the forest if interest rate is 15%