Answer:
The net present value for each option is given below.
(1) $70,000 cash immediately
NPV = 70,000 * 1 = $ 70,000
(2) $24,000 cash immediately and a six-period annuity of $8,100 beginning one year from today, or
NPV = (24,000*1) + (8,100 *(1-((1+7%)^-6)/7%)) = $ 62,609
(3) a six-period annuity of $14,500 beginning one year from today
NPV = (14,500 *(1-((1+7%)^-6)/7%)) = $ 69,115
