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66. Dr. Harold Wolf of Medical Research Corporations (MRC) was thrilled with the response he received from drug companies for his latest discovery, a unique electronic stimulator that reduces the pain from arthritis. The process had not yet passed the rigorous federal testing from Health Canada and was still in the early stages of development, but the interest was intense. He received three offers, described below, for the discovery. An appropriate discount rate for this decision is 10 percent. fer I $1,000,000 now plus $200,000 from years 6 through 15 . Also, if the product had over $100 million in cumulative sales by the end of year 15 , he would receive an additional $3,000,000 at that time. Dr. Wolf thought there was a 70 percent probability this would happen. Offer II Thirty percent of the buyer's gross profit on the product for the next four years. The buyer in this case was Zhay Pharmaceutical. Zhay's gross profit margin was 60 percent. Year 1 sales are projected to be $2 million and then expected to grow by 40 percent per year. Offer III A trust fund would be set up for the next 8 years. At the end of that period Dr. Wolf would receive the proceeds. The trust fund called for semiannual payments for the next 8 years of $200,000. Payments would start immediately (beginning). Determine the present value of each offer and select the best offer