A pension fund pays out $50,000 a year in perpetuity, based on a cost of capital of 5%, to retiring employees. Alternatively, the employee can take out a lump sum of $1 million payable immediately. The employee should choose O the lump sum, because it is available now. the lump sum, because its future value is $25 million the pension fund, because its present value is $1.25 million the pension fund, because it offers steady payments in perpetuity, either option gives the same present value