Your grandfather would like to share some of his fortune with you. He offers to give you money under one of the following scenarios (you get to choose):

1.$8,750 per year at the end of each of the next five years

2.$47,450 (lump sum) now

3.$98,650 (lump sum) five years from now

Requirements

1.Calculate the present value of each scenario using a 6% discount rate. Which scenario yields the highest present value?

2.would your preference change if you used a 10% discount rate?