Julie has just retired. Her company's retirement program has two options as to how retirement benefits can be received. Under the first option, Julie would receive a lump sum of $142,000 immediately as her full retirement benefit. Under the second option, she would receive $21,000 each year for 5 years plus a lump-sum payment of $61,000 at the end of the 5-year period. Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using tables. Required: I-a. Calculate the present value for the following assuming that the money can be invested at 14%. I-b. If she can invest money at 14%, which option would you recommend that she accept?
Julie has just retired. Her company's retirement program has two options as to how retirement benefits can be received. Under the first option, Julie would receive a lump sum of $142,000 immediately as her full retirement benefit. Under the second option, she would receive $21,000 each year for 5 years plus a lump-sum payment of $61,000 at the end of the 5-year period. Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using tables. Required: I-a. Calculate the present value for the following assuming that the money can be invested at 14%. I-b. If she can invest money at 14%, which option would you recommend that she accept?
Chapter5: Gross Income: Exclusions
Section: Chapter Questions
Problem 43P
Related questions
Question
Subject: accounting
![Julie has just retired. Her company's retirement program has two options as to how retirement benefits can be received. Under the
first option, Julie would receive a lump sum of $142,000 immediately as her full retirement benefit. Under the second option, she
would receive $21,000 each year for 5 years plus a lump-sum payment of $61,000 at the end of the 5-year period.
Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using tables.
Required:
1-a. Calculate the present value for the following assuming that the money can be invested at 14%.
1-b. If she can invest money at 14%, which option would you recommend that she accept?
Complete this question by entering your answers in the tabs below.
Req 1A
Req 1B
Calculate the present value for the following assuming that the money can be invested at 14%. (Round your final answer to
the nearest whole dollar amount.)
Option 1
Present value
Option 2](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8fc66754-dc05-453a-a4c8-c79196bcb5d1%2Fc0c72d80-a795-4515-b6bb-1e473d8004b0%2Fh3y8i2x9_processed.png&w=3840&q=75)
Transcribed Image Text:Julie has just retired. Her company's retirement program has two options as to how retirement benefits can be received. Under the
first option, Julie would receive a lump sum of $142,000 immediately as her full retirement benefit. Under the second option, she
would receive $21,000 each year for 5 years plus a lump-sum payment of $61,000 at the end of the 5-year period.
Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using tables.
Required:
1-a. Calculate the present value for the following assuming that the money can be invested at 14%.
1-b. If she can invest money at 14%, which option would you recommend that she accept?
Complete this question by entering your answers in the tabs below.
Req 1A
Req 1B
Calculate the present value for the following assuming that the money can be invested at 14%. (Round your final answer to
the nearest whole dollar amount.)
Option 1
Present value
Option 2
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