Chapter 12.A, Problem 2E

Basic Present value Concepts
Julie has just retired. Her company’s a retirement program has two options as to how retirement benefits can be received. Under the first option, Julie would receive a lump sum of $150000 immediately as her full retirement benefit. Under the second option, she would receive $14,000 each year for 20 years plus a lump-sum payment of $60,000 at the end of the 20-year period.
Required:
If she can invest money at 12%, which option would von recommend that she accept? Use present value analysis.