Q$2)$ A manufacturing firm purchased a heavy$-$duty drilling machine. They were given two payment options:

Option $1$: Make a payment of $$46,500\mathrm{.}00$ immediately to settle the invoice for the machine.

Option $2$: Make a payment of $$17,500\mathrm{.}00$ immediately and a payment of $$18,500\mathrm{.}00$ in $3$ months to settle the invoice.

If money is worth $9\mathrm{.}12\%$ compounded quarterly, answer the following:

a$.$ What is the total present value of Option $2?$ Set the focal date as today.

b$.$ Which option is economically better for the manufacturing firm?