Question

As the winner of the Housecleaners sweepstakes, you are entitled to one of the following prizes: A. $999,999 immediately. B. $100,000 per year forever, starting next year. C. $180,000 per year for 10 years starting immediately. D. $300,000 payable every 2 years over 20 years (first payment to occur 2 years from today). E. $39,000 starting next year growing by 6% forever. In terms of present values, which prize should be chosen if r = 9%? Please show all your work for each of the above and round to 0 decimal places.