2. Time value of money: 12 marks You have won the Powerball lottery and received $100,000. You have determined that there are two different investment opportunities available. Option 1: The money can be placed on deposit at the bank. The interest rate you can earn is 5% compounded annually. Option 2: You can invest in a business opportunity named Thanos Blockchain. The annual profit of the project and the cash flows you receive for the following seven years are shown on the table below (note: both profits and cash flows are earned or received at the end of each year): Years 1 2 - 4 5-6 7 Annual Profits ($) $15,000 $15,000 each Tear $15,000 each year $15,000 Cash Flows ($) $20,000 $18,500 each year $14,500 each year $16,000 Required: (a) Work out the present value of the investment at the bank and the present value of the business opportunity for Thanos Blockchain using a discount rate of 5% p.a. (Note: You can ignore the net present values analysis (NPV) and focusing on calculating and comparing the present values for two options. Round your answer to the nearest whole number)

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