Question: Question 2 As a competition winner you are able to choose from four possible prizes. Your discount rate is 6% per annum. The four prizes

Question 2 As a competition winner you are able to choose from four possible prizes. Your discount rate is 6% per annum. The four prizes from which you may choose are summarised as follows: Option A: 50,000 today Option B: 100,000 in 10 years Option C: 1,100 every month for 5 years with monthly compounding Option D: 3,000 every year for life (indefinitely) For each option, calculate the present value and then explain the choice that should be made. [10 marks)

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