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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 magazin company. It has
After hearing a knock at your front door, you are surprised to see the Prize Patrol from a large, well-known magazin company. It has arrived with the good news that you are the big winner, having won $21 million. You have three opt (a) Receive $1.05 million per year for the next 20 years. (b) Have $8.25 million today. (c) Have $2.25 million today and receive $750,000 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. Pres Annuity of $1.) (Use appropriate factor(s) from the tables provided. Round your final answer to the nearest whole de answers in dollars, not in millions.) Present Value Option A Option B $ 273,000 Option C
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