After completing a long and successful career as senior vice president for a large bank, you are preparing for retirement. After visiting the human resources office, you have found that you have several retirement options to choose from: a. An immediate cash payment of $1.08 million. b. Payment of $56,000 per year for life. c. Payment of $46,000 per year for 5 years and then $66,000 per year for life (this option is intended to give you some protection against inflation). You believe you can earn 6 percent on your investments and your remaining life expectancy is 10 years. 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. Do not round intermediate calculations. Enter your answers in whole dollars, not in millions. Round the final answer to nearest whole dollar.) Option A Option B Option C Present Value
After completing a long and successful career as senior vice president for a large bank, you are preparing for retirement. After visiting the human resources office, you have found that you have several retirement options to choose from: a. An immediate cash payment of $1.08 million. b. Payment of $56,000 per year for life. c. Payment of $46,000 per year for 5 years and then $66,000 per year for life (this option is intended to give you some protection against inflation). You believe you can earn 6 percent on your investments and your remaining life expectancy is 10 years. 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. Do not round intermediate calculations. Enter your answers in whole dollars, not in millions. Round the final answer to nearest whole dollar.) Option A Option B Option C Present Value
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![PA11-5 (Algo) Comparing Options Using Present Value Concepts [LO 11-S1]
After completing a long and successful career as senior vice president for a large bank, you are preparing for retirement. After visiting
the human resources office, you have found that you have several retirement options to choose from:
a. An immediate cash payment of $1.08 million.
b. Payment of $56,000 per year for life.
c. Payment of $46,000 per year for 5 years and then $66,000 per year for life (this option is intended to give you some protection
against inflation).
You believe you can earn 6 percent on your investments and your remaining life expectancy is 10 years.
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. Do not round intermediate calculations. Enter your answers in
whole dollars, not in millions. Round the final answer to nearest whole dollar.)
Option A
Option B
Option C
Present Value](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8aaecd8c-314e-4376-bfd6-eefd0c691075%2F62aa76fc-b09b-4a2e-a390-0fd7063b1b44%2Fsawgn4g_processed.png&w=3840&q=75)
Transcribed Image Text:PA11-5 (Algo) Comparing Options Using Present Value Concepts [LO 11-S1]
After completing a long and successful career as senior vice president for a large bank, you are preparing for retirement. After visiting
the human resources office, you have found that you have several retirement options to choose from:
a. An immediate cash payment of $1.08 million.
b. Payment of $56,000 per year for life.
c. Payment of $46,000 per year for 5 years and then $66,000 per year for life (this option is intended to give you some protection
against inflation).
You believe you can earn 6 percent on your investments and your remaining life expectancy is 10 years.
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. Do not round intermediate calculations. Enter your answers in
whole dollars, not in millions. Round the final answer to nearest whole dollar.)
Option A
Option B
Option C
Present Value
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