ONOFF Chap 5 Problems Due Friday by 11:59pm Points 15 Submitting a text entry box or a file upload Use the examples provided here to work on the following problems (make sure you show all your work) Problem 1: Gabrielle just won $2.75 million in the state lottery. She is given the option of receiving a total of $1,400,000 now, or she can elect to be paid $110.000 at the end of each of the next 25 years. If Gabrielle can earn 5% annually on her investments, from a strict economic point of view which option should she take? PMT I,000 Na5 5 Problem 2: Your firm has the option of making an investment in new software that will cost $278,367 today and is estimated to provide the savings shown in the following Year Savings estimate 1 $76,000 2 $106,400 3 $98,800 4 $53,200 5 $30,400 Should the firm make this investment if it requires a minimum annual return of 9% on all investments? Problem 3. For the mixed stream of cash flows shown in the following table, Year Cash flow stream $27,000 $22,500 $18,000 $ 9,000 $ 4,500 Determine the future value at the end of the final year if deposits are made into an account paying annual interest of 8%, assuming that no withdrawals are made during the period and that the deposits are made: a, At the end of each year. b. At the beginning of each year