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.

Click here to view Exhibit 11B-1 and Exhibit 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 14%. (Use the appropriate table to determine the discount factor(s).)

Julie has just retired. Her company's 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. Click here to view Exhibit 11B-1 and Exhibit 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 14%. Use the appropriate table to determine the discount factor(s).) Present Value of First Option Cash Flow Discount FactorPresent Value Lump-sum payment Present Value of Second Option Cash Flow Discount FactorPresent Value Annual annuity Lump-sum payment Total present value lb. If you can invest money at a 14% return, which option would you prefer? First option Second option