Which option is better receive $120,000 now or $20,000, $50,000, 534,000, 516,000, and $15,000, respectively, over the next five years? The cash flows are at the end of each year except for $120,000 (Click the icon to view Present Value of $1 table.) Click the icon to view Present Value of Ordinary Annuity of $1 table.) Read the requirements Requirement 1. Assuming a 5% interest rate, which investment opportunity would you choose? (If using present value tables, use factor amounts rounded to three decimal places, XXXX. Round your final answer to the nearest whole dollar.) Present Value of Annuity of $1 The present value of the five payments is Present Value of Ordinary Annuity of $1 6% 7% 8% 10% 12% Periods 4% 5% 14% 16% Since the present value of the five payments is than the one payment of $120.000, you should choose the option with Requirement 2. If you could earn 8%, would your choice change? (If using present value tables, use factor amounts rounded to three decimal places, X.XXX. Round your final answer to the nearest whole dollar.) If you could earn 8%, the present value of the five payments would be than the one payment of $120,000 Since the present value of the five payments is you should choose the option with Requirement 3. Assuming an 8% interest rate, what would the cash flow in year 5 have to be in order for you to be indifferent to the two plans? (If using present value tables, use factor amounts rounded to three decimal places, X.XXX. Round your final answer to the For you to be indifferent to the two plans, if you could eam 8%, the cash flow in year 5 would have to be Period 1 0.962 0.952 0.943 0.935 Period 2 1.886 1.859 1.833 1.808 Period 3 3 2.775 2.723 2.673 2.624 Period 4 3.630 3.546 3.465 3.387 Period 5 4.452 4.329 4.212 4.100 Period 6 5.242 5.076 4.917 4.767 Period 7 6.002 5.786 5.582 5.389 Period 8 6.733 6.463 6.210 5.971 Period 9 7.435 7.108 6.802 6.515 Period 10 8.111 7.722 7.360 7.024 Period 11 8.760 8.306 7.887 7.499 Period 12 9.385 8.863 8.384 7.943 Period 13 9.986 9.394 8.853 8.358 Period 14 10.563 9.899 9.295 8.745 Period 15 11.118 10.380 9.712 9.108 Period 16 11.652 10.838 10.106 9.447 Period 1712.166| 11.274 10.477 9.763 Period 18 12.659 11.690 10.828 10.059 Period 19 13.134 12.085 11.158 10.336 Period 20 13.590 12.462 11.470 10.594 0.926 1.783 2.577 3.312 3.993 4.623 5.206 5.747 6.247 6.710 7.139 7.536 7.904 8.244 8.559 8.851 9.122 9.372 9.604 9.818 0.909 0.893 1.736 1.690 2.487 2.402 3.170 3.037 3.791 3.605 4.355 4.111 4.868 4.564 5.335 4.968 5.759 5.328 6.145 5.650 6.495 5.938 6.814 6.194 7.103 6.424 7.367 6.628 7.606 6.811 7.824 6.974 8.022 7.120 8.201 7.250 8.365 7.366 8.514 7.469 0.877 0.862 1.647 1.605 2.322 2.246 2.914 2.798 3.433 3.274 3.889 3.685 4.288 4.039 4.639 4.344 4.946 4.607 5.216 4.833 5.453 5.029 5.660 5.197 5.842 5.342 6.002 5.468 6.142 5.575 6.265 5.668 6.373 5.749 6.467 5.818 6.550 5.877 6.6235.929 A Requirements 1. Assuming a 5% interest rate, which investment opportunity would you choose? 2. If you could earn 8%, would your choice change? 3. Assuming an 8% interest rate, what would the cash flow in year 5 have to be in order for you to be indifferent to the two plans? Print Done Print Done