An individual planning to retire at the end of three years has a defined benefit of $30,000 per year not protected against inflation. In her planning, she uses a thirty-year life expectancy in retirement. She receives an offer of a lump sum payment of $215,000 with an explanation that (1) money in hand is much more valuable than money in the future; (2) she can earn 11 percent or more annually on the stock market if she had the money now: and (3) she could use the money now to pa\ oil a few debts. The risk-free rate is three percent. Analyze the merits and assumption of the offer.