2. Accounting
3. alex meir recently won a lottery and has the option...

# Question: alex meir recently won a lottery and has the option...

###### Question details

Alex Meir recently won a lottery and has the option of receiving one of the following three prizes: (1) $64,000 cash immediately, (2)$21,000 cash immediately and a six-period annuity of $7,700 beginning one year from today, or (3) a six-period annuity of$13,300 beginning one year from today.

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 $115,000 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? 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 PV Annuity Immediate Cash PV Option Option 1 + =$0 Option 2 + = $0 Option 3 + =$0 Which option should Alex choose?
 Table or calculator function: Payment: n = i = Future value: