Assume Rafael can earn an 4 percent after-tax rate of return. Use Exhibit 3.1. Would he prefer $1,500 today or $2,250 in five years? EXHIBIT 3-1 Present Value of a Single Payment at Various Annual Rates of Return Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 12% 0.893 0.797 4% 5% 6% 7% 8% 11% 9% 10% 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.901 0.925 0.907 0.890 0.873 0.857 0.842 0.826 0.812 0.889 0.864 0.840 0.816 0.794 0.772 0.751 0.731 0.712 0.855 0.823 0.792 0.763 0.735 0.708 0.683 0.659 0.636 0.822 0.593 0.567 0.535 0.507 0.784 0.747 0.713 0.681 0.650 0.621 0.790 0.746 0.705 0.666 0.630 0.596 0.564 0.760 0.711 0.665 0.623 0.583 0.627 0.582 0.547 0.513 0.482 0.452 0.731 0.677 0.540 0.502 0.467 0.434 0.404 0.703 0.645 0.592 0.544 0.500 0.460 0.424 0.391 0.361 0.676 0.614 0.558 0.508 0.463 0.422 0.386 0.352 0.322 0.650 0.585 0.527 0.475 0.429 0.388 0.350 0.317 0.287 0.625 0.557 0.497 0.444 0.397 0.356 0.319 0.286 0.257 0.601 0.530 0.469 0.415 0.368 0.326 0.290 0.258 0.229 0.505 0.442 0.388 0.340 0.299 0.577 0.555 0.481 0.417 0.362 0.315 0.263 0.232 0.205 0.275 0.239 0.209 0.183 h