3)you have won the lottery and have the choice of the three cash flows each with a 7% rate of interest.

Calculate the value of Cash Flow Option 1:

The perpetuity for $800 yearly.

4) You have won the lottery and have the choice of the three cash flows each with a 7% rate of interest.

Calculate the value of Cash Flow Option 2:

$1500 per year for 11 years

5)You have won the lottery and have the choice of the three cash flows each with a 7% rate of interest.

Calculate the value of Cash Flow Option 3:

$1100 per year for 16 years with the first payment occuring today.

6)You have won the lottery and have the choice of the three cash flows each with a 7% rate of interest.

With your rate of return at 7%, which of the three Cash Flow Options would you choose and why?