A Woman Can Sell Her Computer Graphics Company for $900,000 $\$ 217,967.04$

Multiple Choice

A woman can sell her computer graphics company for $900,000 cash or for $100,000 plus $65,000 at the end of each year for 4 years. (a) Find the present value of the annuity that is offered if money is worth 7% compounded
Annually. (b) If she takes the $900,000, spends $100,000 of it, and invests the rest in a 4-year annuity at 7%
Compounded annually, what size annuity payment will she receive at the end of each year? (c) Which is better,
Taking the $100,000 and the annuity or taking the cash settlement?

A) (a) $\$ 217,967.04$ ;
(b) $\$ 206,659.68$ ;
(c) $\$ 100,000$ plus the annuity has a smaller present value than $\$ 900,000$ . She should take the cash settlemen
B) (a) $\$ 330,253.10$ ;
(b) $\$ 295,228.12$ ;
(c) $\$ 100,000$ plus the annuity has a larger present value than $\$ 900,000$ . She should take $\$ 100,000$ plus the annuity.
C) (a) $\$ 297,227.79$ ;
(b) $\$ 265,705.31$ ;
(c) $\$ 100,000$ plus the annuity has a larger present value than $\$ 900,000$ . She should take $\$ 100,000$ plus the annuity.
D) (a) $\$ 220,168.73$ ;
(b) $\$ 236,182.49$ ;
(c) $\$ 100,000$ plus the annuity has a smaller present value than $\$ 900,000$ . She should take the cash settlemen