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 $140,000 immediately as her full retirement benefit. Under the second option, she would receive $27,000 each year for five years plus a lump-sum payment of $59,000 at the end of the five-year period.

Click here to viewExhibit 11B-1andExhibit 11B-2, to determine the appropriate discount factor(s) using tables.

Required:
1a.	Calculate the present value for the following assuming that the money can be invested at 12%.(Use the appropriate table to determine the discount factor(s).)

1b.	If you can invest money at a 12% return, which option would you prefer?
	First option Second option