You have contracted to perform annual corporate motivation programs for a large Hotel Investment Conglomerate for the next five years. These programs will be based on annual week-long summer outdoor adventure programs designed for top, middle, and entry level managers in this corporation. The conglomerate has agreed to pay all direct and indirect expenses of putting on the programs as they occur. Over and above direct and indirect expenses for running these programs each year, the company has agreed to pay you additional compensation for your services. They have offered to do so in one of three ways.

Option 1. The Company would pay you $15,000 per year for each of the five years the program is in place, plus a lump sum payment to you of $12,000 at the end of the five years as an inducement to complete the entire program. Assume a 6% discount rate.

Option 2. The Company would pay your compensation in the form of a single lump sum payment of $70,000 right now to cover your compensation for the next five years. Assume a 6% discount rate.

Option 3. The Company would pay your compensation in the form of a single lump sum payment of 100,000 five years from now to cover your compensation for the 5-year program. Assume a 6% discount rate.

1. Based only on the monetary value of each of the options, which would you choose? What is the 2^nd best option? The 3^rd? Show your computations below each option above.