3. Johnhas just won the Flyball Lottery. He has two options for receiving his prize. The first option is to accept a $135,000cash payment today. The second option is to receive $17,700at the end of each of the next19years and a $37,900lump sum payment in the20th year.Johncan invest money at a10% rate.(a)Calculate the present value of the two options.(For calculation purposes, use 4 decimal places as displayed in the factor table provided and round final answer to 0 decimal place, e.g. 58,971.) Option 1 Option 2 Present value ? ?Which option shouldJohnchoose to receive his winnings? (b)IfJohncould invest money at13%, calculate the present value of the two options.(For calculation purposes, use 4 decimal places as displayed in the factor table provided and round final answer to 0 decimal place, e.g. 58,971.) Option 1 Option 2Present value ? ?Which option should he choose?4.Flounders Lawn Service needs to purchase a new lawnmower costing $8,416to replace an old lawnmower that cannot be repaired. The new lawnmower is expected to have a useful life of6years, with no salvage value at the end of that period.(a)IfFlounders required rate of return is11%, what level of annual cash savings must the lawnmower generate to be considered an acceptable investment under the net present value method?(For calculation purposes, use 4 decimal places as displayed in the factor table provided and round final answer to 0 decimal place, e.g. 58,971.)Annual cash savings should be$enter the annual cash savings in dollars(b)IfFlounders required rate of return is18%, what level of annual cash savings must the lawnmower generate to be considered an acceptable investment under the net present value method?(For calculation purposes, use 4 decimal places as displayed in the factor table provided and round final answer to 0 decimal place, e.g. 58,971.)Annual cash savings should be$enter the annual cash savings in dollars5.TheBrambleCompany is planning to purchase $487,000of equipment with an estimated7-year life and no estimated salvage value. The company has projected the following annual cash flows for the investment:Year Projected Cash Flows1 $207,0002 132,0003 109,0004 51,7005 61,200 6 44,4007 46,300Total $651,600a. Calculate the net present value of the proposed equipment purchase.Brambleuses a6% discount rate.(For calculation purposes, use 4 decimal places as displayed in the factor table provided and round final answer to 0 decimal place, e.g. 58,971.)?