fter completing a long and successful career as senior vice president for a large bank, you are preparing for retirement. After visiting the human resources office, you found that you have several retirement options to choose from:

An immediate cash payment of $1.04 million.

Payment of $51,000 per year for life.

Payment of $41,000 per year for the first 3 years and then $61,000 per year for the remainder of your life (this option is intended to give you some protection against inflation).

You believe you can earn 7 percent on your investments, and your remaining life expectancy is 6 years.

Required:

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.)

Determine which option you prefer.

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.) Note: Use appropriate factor(s) from the tables provided. Do not round intermediate calculations. Enter your answers in whole dollars, not in millions. Round the final answer to nearest whole dollar.

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	Present Value
Option A
Option B
Option C