You are offered one of the following two options for free. Option A includes a fixed cash flow of 250$ every year forever that starts right now (first payment at the end of this year (t = 1)). Option B includes a fixed cash flow of 250$ every year forever, but it starts a year later (first payment at the end of the next year (t = 2)). Interest rates are at 8% per year for every maturity.

1. What is the present value of Option A when it starts (at t = 0)?

2. What is the present value of Option B when it starts (at t = 1)?

3. Which one should you pick and why?