Question: Compare two investment options. The cost to invest in either option is the same today. Both options will provide you with dollar 20,000 of income. Option 1st pays five (5) annual payments beginning with $8,000 the 1st year followed by 4 annual payments of $3,000 each. Option 2nd pays five (5) annual payments of $4,000 each. Which one of the following statements is correct given these two investment options?
[A] Both options are of equal value given that they both provide dollar 20,000 of income.
[B] Option A is the better choice of the two given any positive rate of return.
[C] Option B has a higher present value than option A given a positive rate of return.
[D] Option B has a lower future value at year five than option A given a zero rate of return.
[E] Option A is preferable because it is an annuity due.