You won a raffle while you were down the shore with friends. For your prize, you can choose among the following three alternatives. If you believe that an 6% return is the appropriate discount rate to use, what is the present value of each alternative? Which should you prefer?
a) $15,000 six years from today
b) $10,000 today
c) $4,000 today plus four annual payments of $2,000, the first of which would occur one year from today
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