Ms$.$ Echols is the owner and beneficiary of a $$150,000$ insurance policy on her mother$$s life. Ms$.$ Echols has paid $$46,000$ premiums, and the policy is fully paid up $($no more premiums are due$).$ She needs money and is considering cashing in the policy for its $$95,000$ cash surrender value. Alternatively, she can borrow $$70,000$ against the policy from the insurance company. She will pay $5$ percent annual interest $($a nondeductible personal expense$)$ and repay the loan from the death benefit. Ms$.$ Echols$$s mother is in poor health and should live no more than $10$ years. Ms$.$ Echols$$s marginal tax rate on ordinary income is $24$ percent. Use Appendix A and Appendix B$.$

Required:

Compute the tax cost and the after$-$tax cash flow if Ms$.$ Echols surrenders the policy for her immediate cash requirement.

Assuming a $6$ percent discount rate, compute the NPV of the after$-$tax cash flow if she instead opts to borrow against the policy. Assume her mother dies on the last day of year $9.$

Assuming a $6$ percent discount rate, should she cash in the policy or borrow against it$?$