What are the answers? For both the required one and two. G calculator-Google Sea

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What are the answers? For both the required one and two.

G calculator-Google Searc a Secure https://newconnect.mheducation.com/flow/connect.html Chapter 6 6 Saved Help Save & Exit Submit Answer each of the following independent questions 5 Alex Meir recently won a lottery and has the option of receiving one of the following three prizes: (1) $70,000 cash immediately, (2) $24,000 cash immediately and a six-period annuity of $8,100 beginning one year from today, or (3) a six-period annuity of $14,500 beginning one year from today. (EV of $1. PV of $1. EVA of $1. PVA of $1. EVAD of $1 and PVAD of S1) (Use appropriate factor(s) from the tables provided.) 2.5 oints 1 Assuming an interest rate of 7%, determine the present value for the above options. Which option should Alex choose? 2. The Weimer Corporation wants to accumulate a sum of money to repay certain debts due on December 31, 2027. Weimer will make annual deposits of $130,000 into a special bank account at the end of each of 10 years beginning December 31, 2018. Assuming that the bank account pays 8% interest compounded annually, what will be the fund balance after the last payment is made on December 31, 2027? eBook Print References Complete this question by entering your answers in the tabs belovw Required 1 Required 2 Assuming an interest rate of 7%, determine the present value for the above options. Which option should Alex choose? (Round your final answers to nearest whole dollar amount.) Annuity Payment Immediate Cash PV Annuity PV Option Option 1 Option 2 Option 3 Which option should Alex choose? Required 2 >

Explanation / Answer

1 Annual Payment * PV of annuity + Immediate Cash = PV of cash flow Option 1 * + 70000 = 70000 Option 2 6100 * *4.76654 + 24000 = 53075.89 Option 3 14500 * *4.76654 + 0 = 69114.83 * Sum of PV FACTOR OF 7% FOR 6 YEARS OPTION 1 IS BEST WITH HIGHEST CASH FLOW 2 Fund balance = 1,30,000[[(1+r)^n-1]/n] = 130000[[(1+.08)^10-1]/10 = 130000*14.48656 $ 1,883,252.80

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