Lights, Camera, and More sells filmmaking equipment. The company offers three purchase options: (1) pay full cash today, (2) pay one-half down and the remaining one-half plus 10% in one year, or (3) pay nothing down and the full amount plus 15% in one year. George is considering buying equipment from Lights, Camera, and More for $150,000 and therefore has the following payment options:

	Payment Today	Payment in One Year	Total Payment
Option 1	$150,000	$ 0	$150,000
Option 2	75,000	82,500	157,500
Option 3	0	172,500	172,500

Required: 1-a. Assuming an annual discount rate of 11%, calculate the present value and the total cost. 1-b. Which option's cost has the lowest present value?