3.) As a winner of a breakfast cereal competition, you can choose one of the following prizes.

If the opportunity cost of capital is 12 percent, which is the most valuable prize?

Show work.

(a)$100,000 nowAnswer: ___________

(b)$180,000 at the end of 5 yearsAnswer: ___________

(c )$11,400 a year foreverAnswer: ___________

(d)$19,000 for each of 10 yearsAnswer: ___________

(e)$6500 next year and increasing thereafter by 5 percent a year forever.

Answer: ___________