Upon the untimely and tragic death of their wealthy uncle, his heirs wanted to memorialize him with a named donation to the local hospital. They offered the hospital a choice of $60,000 annual payments forever or a lump sum payment of $700,000 today:

a. What should be the decision if the hospital thinks it could earn an average of 5 percent annually on this donation?

b. What should be the decision if the hospital thinks it could earn an average of 9 percent annually on this donation?

c. What should be the decision if the hospital thinks it could earn an average of 13 percent annually on this donation?