Pastor Michael McAlister has been senior and full-time pastor for North Faith Church in Tyler, Texas for the past 25 years. His duties include conducting 3 week-day services and 5 weekend services. He also directs all ministries at the church and manages all external services. North Faith Church has approximately 7,000 accounted members. Monthly donations are approximately $192,000. Total expenses for the Church, excluding Pastor McAlister's annual salary of $80,000 are approximately $22,000. This includes Church maintenance, staff salary, building maintenance, inventory, etc . On May 7\1. Assume a discount rate of 6 percent is used. Which of the three projects has the highest present value? (Note: In analyzing the rst proposal, take the present value of the 20-year $300,000 annuity. Then take the present value of the deferred annuity of $500,000 that will run 'oni the 21st through the 40th year. The answer you get for the second annuity will represent the value at the beginning of the let year {the same as the end of the 20th year). You will need to discount this lump sum value back or 20 years as a single amount to get its present value. You then add together the present value of the rst and second annuity. The second and third proposals are straightforward and require no further explanation.) 2. Now assume that a discount rate of l 1 percent is used instead of 6 percent. Which of the three alternatives provides the highest present value? 3. Explain why the change in outcome takes place between question 1 and question 2. 4. IfKnox Hollister thinks additional punitive damages are likely to be $4 million in a jury trial, should he be more likely to settle out-of-court or go before the jln'y? 5. Should Pastor Michael McAlister be red by North Faith Church? 6. Do you agree or disagree that the climb should be using donations and insurance money to cover Pastor McAlister's costs