Question $7$:

Triston McKenzie is considering early retirement. He has a choice of three pension plans.

Plan A provides for an immediate cash payment of $$500,000.$

Plan B provides for the payment of $$50,000$ per year for $20$ years and the payment of $$500,000$ at the end of year $20.$

Plan C will pay $$75,000$ per year for $20$ years.

Triston estimates he can earn a return of $8\%.$ Using your skills in capital budgeting, provide an analysis to show Triston which plan he should choose. $($hint $-$ he is effectively paying $$500,000$ if he chooses plan $B$ or $C$ and the $8\%$ is the hurdle rate.$)$