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 $131,000 immediately as her full retirement benefit. Under the second option, she would receive $20,000 each year for 13 years plus a lump-sum payment of $50,000 at the end of the 13-year period.

Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using tables.

Required:

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