Larry Mattingly turned 20 years old today. His grandfather had established a trust fund that will pay him $78,000 on his next birthday. However, Larry needs money today to start his college education, and his father is willing to help. Mr. Mattingly has agreed to give Larry the present value of the $78,000 future cash inflow, assuming a 8 percent rate of return. (PV of $1 and PVA of $1) (Use appropriate factor(s) from the tables provided.)

Required

a. Determine the amount of cash that Larry Mattingly's father should give him. (Round your final answer to the nearest whole dollar value.)

Gail Trevino expects to receive a $620,000 cash benefit when she retires eight years from today. Ms. Trevinos employer has offered an early retirement incentive by agreeing to pay her $363,000 today if she agrees to retire immediately. Ms. Trevino desires to earn a rate of return of 10 percent. (PV of $1 and PVA of $1) (Use appropriate factor(s) from the tables provided.)

Required

1. Calculate the present value of the $620,000 future cash benefit. Assuming that the retirement benefit is the only consideration in making the retirement decision, should Ms. Trevino accept her employers offer? (Round your final answer to the nearest whole dollar value.)