The Smiths have bought an investment which will pay them $1,000 per year for five years. Ajax Brokers has just offered to buy the annuity from the Smiths for $4,200. If the Smiths require a rate of return of 7% per year, should they sell?

A. Yes, because the offer exceeds the present value of $4,100.

B. Yes, because the offer exceeds the PV of $3,740.

C. No, because the offer is less than the PV of $4,329.

D. No, because the IRR for Ajax is less than 5%.

E. No, because the tax effects are undetermined.

Please show work, Thanks!