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Julie has just retired. Her companys retirement program has two options as to how retirement benefits can be received. Under the first option, Julie would

Julie has just retired. Her companys retirement program has two options as to how retirement benefits can be received. Under the first option, Julie would receive a lump sum of $142,000 immediately as her full retirement benefit. Under the second option, she would receive $21,000 each year for five years plus a lump-sum payment of $61,000 at the end of the five-year period.

Use Excel or a financial calculator to solve. Round answers to the nearest dollar.

Required:
1a.

Calculate the present value for the following assuming that the money can be invested at 14%.

Present Value of First Option
Lump-sum payment
Present Value of Second Option
Total present value

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