Answer each of the following independent questions.
1.
Alex Meir recently won a lottery and has the option of receiving one of the following three prizes: (1)
$86,000 cash immediately, (2) $32,000 cash immediately and a six-period annuity of $9,200
beginning one year from today, or (3) a six-period annuity of $17,400 beginning one year from today.
a.
Assuming an interest rate of 6%, determine the Present value for the above options. (Use
PVA of
$1
)
(Round "PV Factors" to 5 decimal places and final answers to the nearest dollar amount.)

b.
Which option should Alex choose?