An author of a best-selling novel in the United States was offered two alternatives by a publisher for the right to publish her book: The first alternative was a single lump sum payment of S2,000,000 with no further royalties in the future, or A royalty of 15% on the gross selling price of each book sold. The publisher expects to sell 500,000 copies of the hard-bound edition for the first-year costing $22.50 each, and 500,000 copies of the paperback edition each year for the next 3 years which sells for $5.95 each. Payments to the author are made at the end of each of the 4 years. Assume that no further royalty payments will be paid after 4 years. If money is worth 8.5% to the author, which alternative should she accept? Disregard income tax considerations