BACKGROUND: Congratulations! You have won a $10,000,000 lawsuit settlement for violation of your patent on a smart pillow that promotes learning while sleeping. Under the settlement, you will be receiving 10 annual payments of $1,000,000 beginning in one year. Anxious to reinvest the funds in your fledgling business, you inquire about selling your winnings to I. M. Worth, Inc. In exchange for the annuity, Worth offers you two options. Option A is an immediate payment of $805,000 and nine subsequent annual payments increasing at a rate of 4% per year. This increase will keep you ahead of inflation. Option B is an immediate lump sum payment of $7,300,000 REQUIRED: Prepare an Excel spreadsheet to answer the following questions. In order to receive full credit for the assignment, you must attach a copy of your Excel spreadsheet printed with the formulas showing (use the "Show Formulas" option) 1. In parallel columns, calculate the total payments to be received under the three options. Use the future value formula [FV-$1(1+i)"] to calculate the future payments under Option A from I.M. Worth 2. Assuming a discount rate of 4%, determine the present value of Option A. How do you 3. 4. 5. know your answer is correct? (Excel has many built in functions. Use the "NPV" function to solve this question and the following three questions.) If the discount rate is 4%, which option would you choose? If the discount rate is 6%, which option would you choose? If the discount rate is 8%, which option would you choose