1.You have a choice of accepting either of two 5-year cash flow streams or lump-sum amounts given

End of yearCash flow stream

Alternative IAlternative II

1$ 7,000$ 11,000

27,0009,000

37,0007,000

47,0005,000

57,0003,000

Lump-sum amount

At time zero (t = 0)$28,250$28,000

Assuming 10 per cent required rate of return, which alternative (I or II) and in which form (Cash flow or lump-sum) would you prefer and why?