Julie has just retired. Her companys retirement program has two options as to how retirement...
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| Julie has just retired. Her companys retirement program has two options as to how retirement benefits can be received. Under the first option, Julie would receive a lump sum of $134,000 immediately as her full retirement benefit. Under the second option, she would receive $28,000 each year for five years plus a lump-sum payment of $53,000 at the end of the five-year period. |
| Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factor(s) using tables. |
| Required: | |
| 1a. | Calculate the present value for the following assuming that the money can be invested at 12%. (Round discount factor(s) to 3 decimal places.) |
| 1b. | If you can invest money at a 12% return, which option would you prefer? | ||||
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