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After hearing a knock at your front door, you are surprised to see the Prize Patrol from a large, well-known magazine subscription company. It has

image text in transcribed After hearing a knock at your front door, you are surprised to see the Prize Patrol from a large, well-known magazine subscription company. It has arrived with the good news that you are the big winner, having won $27 million. You have three options: a. Receive $1.35 million per year for the next 20 years. b. Have $9.75 million today. c. Have $3.75 million today and receive $1,050,000 for each of the next 20 years. Your financial adviser tells you that it is reasonable to expect to earn 13 percent on investments. Required: 1. Calculate the present value of each option. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of \$1.) 2. Determine which option you prefer. Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Determine which option you prefer

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