After hearing a knock at your front door, you are surprised to see the Prize...
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Accounting
After hearing a knock at your front door, you are surprised to see the Prize Patrol from a large, well-known magazine subscription company. It has arrived with the good news that you are the big winner, having won $21 million. You have three options. (a) Receive $1.05 million per year for the next 20 years. (b) Have $8.25 million today. Have $2.25 million today and receive $750,000 for each of the next 20 years. (C ) Your financial adviser tells you that it is reasonable to expect to earn 13 percent on investments. Required: 1. Calculate the present value of each option. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided. Round your final answer to the nearest whole dollar. Enter your answers in dollars, not in millions.) Present Value Option A Option B Option C 2. Determine which option you prefer. Optionc Option A Option B
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